LegalVision has assisted many small business owners who are engaging in the sale of their business. If you have sold a business in the past or have purchased one, you will know that when a business is sold there are various business assets that may be transferred to the purchaser during the sale.
Traditional assets that are transferred include stock in trade, equipment, contact numbers and sometimes, client databases. However, now that most businesses have web pages and social media accounts that directly link to the business, many business owners want to know whether these items count as the property of their business.
The answer is yes.
Should I transfer these accounts to the purchaser?
With most businesses establishing an online presence by interacting in social media, social media accounts have become valuable business assets.
As a result of this, most business purchasers are eager to gain access of the business’s social media accounts in order to tap into a large client market. So, for example, if you are purchasing a business you would want access to all the business’s social media accounts in order to develop your network of online followers and distribute important business information and promotional material to them.
Of course, as a business owner, it is entirely up to you whether you would like to transfer your social media accounts to the purchaser. However, most purchasers who understand the value in social media accounts will often request this to be transferred along with the business and as such, the transfer of these accounts is something you should be considering.
How do I transfer social media accounts?
Since social media accounts qualify as a form of property, when you sell your business to a purchaser, you can transfer ownership of these accounts to the purchaser. While this may seem like an abstract concept that is difficult to execute, in reality it is quite simple.
In order to transfer the social media accounts to the purchaser, you can insert a provision into the contract for the sale of business indicating this intention. To ensure that this provision is drafted correctly, it is worth getting a lawyer to draft this provision for you or to review it once you have drafted it.
What details do I need to include to effect the transfer?
When you are transferring the accounts you will need to think about what information the purchaser will need in order to access and use the accounts. For example, will they need a username or password? Will they need the URLs of the accounts? Most of the time a purchaser will require these details, which you must provide to them in order to effect the transfer.
You can include these details into the contract so that the purchaser may have reference to the account details upon completion of the sale. You could also provide the purchaser with an undertaking that you will provide any confidential details and passwords to the purchaser more privately after completion of the sale.
Social media accounts are very important for businesses that thrive online. If you are operating a business with many social media accounts, you should ensure that your usernames and passwords for each account are kept in a secure location so that it will be easy for you to transfer these details to a purchaser should the need arise. To speak with a tech solicitor about your intellectual property, contact LegalVision on 1300 544 755.