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Stock Purchase vs. Asset Purchase
A stock purchase occurs when the buyer acquires shares of the target company directly from its shareholders. This gives the buyer ownership and control of the entire company, including its assets, liabilities, and contracts. Because the legal entity itself does not change, most contracts, licenses, and permits remain intact, allowing business operations to continue without disruption.
Licensing Agreements for Startups: How to Protect, Monetize, and Scale Your IP
If your startup is built on software, content, data, or inventions, you likely need a Licensing Agreement. Whether you’re giving others the right to use your IP or licensing third-party tech for your own product, a well-drafted agreement is the key to protecting your rights and unlocking revenue.
FAQs
Open allNo. Buyers must choose which employees to hire and issue new contracts, though they may assume existing benefits or tenure for retention purposes.
Yes. Buyers often gain a stepped-up basis in acquired assets, creating valuable tax deductions.
The ability to avoid inheriting unknown liabilities while selectively acquiring only valuable assets.
Yes. Most agreements include termination clauses, either for breach of terms or for convenience, but the scope of surviving rights (like confidentiality) must be addressed.
Licenses can be monetized through royalties, per-user pricing, subscriptions, or flat fees - depending on your business model.
An exclusive license grants rights to only one licensee, while a non-exclusive license allows multiple licensees to use the IP at the same time.
Not all, but if you’re sharing software, content, or technology with users, partners, or customers - or if you rely on third-party IP - you likely need one.
A Terms of Service sets rules for using your platform, while a Privacy Policy explains how you handle personal data. Both are critical for compliance and user trust.
You should update it whenever your business changes how it collects, uses, or shares data, or when new regulations apply to your users.
Templates often miss details about your specific tools and data practices. Tailoring your policy is safer and more effective.
Yes, if you collect personal data. Even basic analytics or email sign-ups typically trigger the need for a Privacy Policy.
You should update them whenever you change your business model, collect new types of data, or expand into new jurisdictions. Major updates should require re-consent from users.
It may add a small step, but when designed well, active consent rarely impacts conversions. In fact, it can build trust by showing transparency.
Yes. Regulations like GDPR and CCPA require active consent in many cases, especially where personal data is involved.
Active implementation provides stronger legal enforceability, making it the safer choice for most startups. However, passive terms may be acceptable for low-risk websites with minimal user interaction.
You should review your terms any time your business model changes—such as adding subscriptions, launching new features, or expanding to new jurisdictions.
Your ToS governs user behavior and platform rules, while your Privacy Policy explains how you collect and use data. Both are essential for compliance and trust.
Templates are risky because they may not cover your unique risks or could include clauses that create unexpected obligations. Tailored terms are more effective.
Yes. Even if you’re in an early stage, a ToS helps protect your company from liability and sets clear rules for users.