Who Should Own Your Trademarks: You Or Your Company?

Who Should Own Your Trademarks?

When launching a business, registering a trademark in the countries where you operate (including where you manufacture) is often, and wisely, one of the first steps you as an entrepreneur will take to protect your brand.

But a deceptively simple question quickly arises: Who should own the trademark? You as an individual, or your corporate entity (like an LLC or corporation)? If you have multiple corporate entities, which one?

This decision can have legal, operational, and even tax implications, especially as your business grows, takes on partners, or faces financial or legal challenges. Let's explore the pros and cons of each approach, and why consistency between your legal filings and real-world usage is critical.

Option 1: Individual Ownership of the Trademark

Some business owners choose to register the trademark in their personal name, even if their products or services are sold through a company.

Pros:

Direct control: You personally retain ownership of the brand, even if the business entity changes or dissolves.
Continuity: If the company is restructured, sold, or goes through financial distress, your personal trademark ownership may shield the brand from being considered a business asset.
Flexible use across ventures: You can license the mark to different businesses or projects you control without transferring ownership.

Cautions:

Need for documentation: If your LLC or corporation is using the mark in commerce, you must document the relationship, typically through a trademark license agreement between you and the entity.
Inconsistency risk: If the trademark application says you're the owner, but all real-world use (such as its website, packaging, social media) points to the business, your ownership may be challenged.
Potential for confusion in litigation or bankruptcy: Courts may disregard personal ownership claims if it appears the company was the real user or purchaser of the brand.
Passport required: Individual trademark applicants in China must provide an image of the data page of their passport to the China National Intellectual Property Administration (CNIPA). Driver's licenses and other forms of identification are not accepted, meaning that filing as an individual is not an option without a valid passport. Additionally, CNIPA does not accept Taiwan or BN(O) passports as valid identification.

Best Practice:

Create a simple license agreement allowing the entity to use the mark and specifying that you retain ownership.
Have the company issue a resolution acknowledging the license and stating that it does not claim ownership.

Option 2: Corporate Ownership of the Trademark

Alternatively, you can register the trademark in the name of your LLC or corporation. This will usually be the same entity through which you conduct business. However, in some cases, it might make sense to use a separate entity whose primary role is to own trademarks and other intellectual property. Some businesses form a separate holding company just for intellectual property. This can isolate IP from business liabilities and make licensing across multiple ventures cleaner — but it requires careful structuring

Pros:

Clean alignment with business use: The entity selling the goods or services is also the owner of the brand.
Consistency in trademark filings: There's typically no need to explain licensing or related-party use.
Continuity if something happens to you: Since an LLC or corporation has a separate legal existence, the mark remains with the entity if you retire, become incapacitated, or pass away.
Simplicity in business transactions: The trademark can be sold or transferred as part of a broader sale of the business entity, simplifying due diligence and asset transfer.
Credibility and professionalism: Having a legal entity own the trademark may enhance your business's perceived legitimacy, especially in B2B or investor-facing contexts. This is particularly true in countries with more formal business cultures.

Cautions:

Inconsistency risk: Problems can arise if the use of the trademark becomes divorced from its ownership. For example, a new entity might begin operating the business (after restructuring or for tax reasons) while the original entity retains trademark ownership. Or an individual may operate the business in practice even though a company technically owns the mark. While you're not necessarily locked into a particular structure, it's critical to ensure that any changes in ownership are properly documented and, if required, recorded with trademark authorities (such as CNIPA). If the trademark owner is not the actual operator of the business, a formal license or use agreement should be in place.
Entity maintenance is essential: If your company is administratively dissolved (for example, for failure to file annual reports), the trademark could become vulnerable or unclear in ownership.
Loss of personal control: If you later bring in partners or investors, the trademark becomes a business asset that may be diluted or transferred without your full control.
Exposure to company liabilities: Creditors or bankruptcy trustees may seize the trademark as a company asset.
Proof of existence required: CNIPA requires trademark applicants to prove the existence of the owning entity. While a screenshot from a U.S. state corporate database was once sufficient, CNIPA has recently tightened documentation standards, sometimes requiring a certificate of good standing. In some jurisdictions, where corporate information is not available online, original scanned documents may be required.

When Each Option Works Best

Choosing the right trademark ownership strategy is crucial for long-term brand protection and business flexibility. The best approach depends on your current structure and future aspirations.

Choose Individual Ownership When:

You're a solo entrepreneur planning multiple ventures (like a consultant who might launch different service lines)
Your industry has high liability risks, and you want to shield the brand from potential creditors
You're in early-stage discussions with potential partners and want to maintain brand control during negotiations
You operate in multiple states or plan international expansion where separate licensing provides flexibility

Choose Corporate Ownership When:

You have or plan to bring in business partners who should share in brand ownership
You're seeking investment and want the trademark as a company asset for valuation purposes
Your business model involves significant operational liability where personal asset protection is paramount
You operate a single business with no plans for multiple ventures

Trademark Ownership Tax Considerations

There may also be tax implications, depending on how the trademark is owned and used. For example:

If the trademark is personally owned and licensed to your company, you may be able to structure royalty payments that shift income and potentially reduce tax liability. For instance, Jane owns a trademark personally and licenses it to her LLC. The LLC pays her a monthly royalty, which shifts taxable income and may offer planning opportunities, though it can also increase reporting complexity.
On the flip side, such payments could create additional complexity for bookkeeping and reporting.

It's always best to consult with an accountant before deciding on a trademark ownership structure for tax purposes.

The Importance of Consistency

Regardless of the ownership model you choose, it's critical to ensure that:

The trademark application matches reality, with the named owner is the one using or authorizing use of the mark in commerce.
Proof of use (as may be required to maintain the trademark registration or respond to a non-use allegation) show the correct ownership context.
Your contracts, website disclaimers, and marketing materials don't create confusion about who owns the brand.
Unless there are compelling reasons to do otherwise, consolidate ownership.

Inconsistent representations can lead to refusals during examination, weaken your rights, or open the door to challenges in disputes or insolvency proceedings.

Trademark Ownership Considerations for Growing International Businesses

If you plan to expand internationally, ownership structure becomes even more critical:

Personal Ownership Advantages:

Easier to license the mark to foreign subsidiaries or distributors
Maintains centralized control across multiple jurisdictions
Simpler to manage if you establish entities in different countries

Corporate Ownership Complications:

May require complex inter-company licensing agreements for international operations
Could create tax inefficiencies if the trademark-owning entity isn't in an optimal jurisdiction
Might complicate foreign trademark registrations if ownership structures differ by country

Best Practice:

If international expansion is likely within 3-5 years, consider how your ownership choice will affect global trademark strategy and consult with international IP counsel early.

Common Trademark Ownership Mistakes That Can Cost You

The "Set It and Forget It" Approach

Registering personally but never creating a license agreement with your company. Result: Trademark ownership can be challenged if the company appears to be the actual user.

Inconsistent Documentation

Ignoring Entity Maintenance

Letting your LLC get administratively dissolved while it owns your trademark. Result: Unclear ownership that can take months and significant legal fees to resolve.

Partner Problems

Adding business partners after personally owning a trademark without updating ownership structure. Result: Partners may claim rights to a brand they helped build but don't legally own.

Final Thoughts

There's no one-size-fits-all answer to the question of who should own a trademark — but there is a right answer for your specific circumstances. The key is to:

Weigh control, flexibility, and risk tolerance,
Ensure consistency between ownership and usage, and
Formalize any ownership-use split with the right documentation.

Whether you're registering a new mark or reevaluating an existing one, careful planning now can prevent major headaches later.

Whether you're registering a new mark or reevaluating an existing one, careful planning now can prevent major headaches later. If you have questions about trademark strategy or ownership structure, or feel overwhelmed by the details, our trademark team is here to help you find the right setup for your brand.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.