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Who should own the copyright to the game I've created, me or my LLC?

This is a single-member LLC which I'll be forming specifically to brand and sell the games I create.

Should I officially transfer my copyright to the LLC, or should I license my LLC to make use of it instead? Briefly, why?


Bonus Question:
Is a signed plain-English document which I draft myself "official enough" to act as a license for my LLC to utilize my individual copyright?


Bonus Question:
I possess the full rights to the game I've created, and the copyright is currently unregistered. There is an 8-month processing time for copyright applications. Do I have to wait until it's registered before I can legally transfer or license it?

  • By "should", do you mean what would we advise you from a legal perspective as being most advantageous to you? – user6726 Aug 17 '16 at 18:35
  • Indeed, that was my intended meaning. Recognizing of course that any advice received is for my personal edification, and not a substitute for legal council. – AlwaysSunny Aug 17 '16 at 18:39
  • I don't think these are questions easily answered here as it most likely depends on how your affairs are structured and what your plans are. For example the threats to an LLC are different to threats to you - so it depends what threats you want to protect against. Similarly if you are looking for funding based on the games you create, it may be reasonable for the funders to want the IP to be in the company they provide the funds to. This only scratches the surface - you should be asking an accountant or the entity that helps you set up / manage your legal structures. – davidgo Aug 18 '16 at 4:10
  • Thank you for your comment. I was afraid it wouldn't be cut n' dry, though I've since received advice similar to the above, which will help me make an informed decision. – AlwaysSunny Aug 18 '16 at 6:14
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Tricky. First, what is better for you? You usually start an LLC to protect yourself (the person) from liability in case things go wrong. Worst case, you lose all the assets of the LLC. So if the LLC owns the copyright, that is an asset, which can be lost if the LLC goes bankrupt. So I'd say it's better for your protection if you own the copyright personally.

If you created the software in your own time, before the LLC was started, then you own the copyright. You should create a proper contract saying that the LLC has the non-exclusive right to market the software and keep profits from the sale of the software, and that this agreement can be cancelled by you at any time. Signed by you, as a private citizen, and by the director of the LLC, which happens to be you as well, on behalf of the LLC.

That will give you maximum personal protection. On the other hand, investors won't be willing to invest in your LLC, because it basically owns nothing of any value. So if you want investments, then you may be less able to protect your assets, because the investors want to protect their assets as well.

  • Thanks for writing up a full-fledged answer. Perhaps it's not quite as complicated as I thought. I was looking for any "gotchas" that might be mysterious to a layperson. I certainly feel better informed. Much obliged, – AlwaysSunny Aug 18 '16 at 18:53
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Registration of copyright is not required until you intend to sue someone in US federal court. The legal author automatically owns the copyright from the moment the work is created in a "tangible form", i.e., one from which it can be copied, displayed or performed. If you were not an employee of the LLC when you created it, then it was not a "work made for hire" unless it qualifies under the rules for contracts for certain types of independently created works (there are nine statutory types in 17 USC 101). You may certainly LICENSE your LLC to use your works or may "capitalize" your LLC by transfer of its value to the LLC in exchange for "membership", as determined by your circumstances.

One possible downside to retaining ownership is that it makes enforcement slightly more complicated, even if the LLC has an exclusive license.

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