Who Owns Your Code? Navigating Delivery and Transparency

It happens more often than most founders think. You hire a talented freelancer or agency, they build your MVP, everything works perfectly… until you try to scale, switch vendors, or raise funding. Suddenly, you realize you don’t know who owns the source code.

Maybe the developer kept parts of it private. Maybe there’s no documentation. Or maybe, legally speaking, the code belongs to them.

This is a huge business risk. Without ownership of software source code, you might be unable to:

• Update or maintain your own product.
• Switch to another developer or agency.
• Sell your company or attract investors.
• Defend yourself in IP disputes.

That’s why understanding code ownership is a foundation of your company’s value.

The laws governing software ownership vary by country, but they generally revolve around copyright and intellectual property rights.

In general, the code belongs to the author. However, there are some nuances. First, let’s look at common scenarios and their unique challenges:

• In-house Development: Generally, the employer owns the code developed by its employees. However, it may not be obvious, depending on legislation. It is best to set the rules regarding code ownership in employment contracts.
• Outsourcing: In this case, ownership is more ambiguous. Without a clear agreement (in writing), the developer (whether they’re a freelancer or an agency) might be viewed legally as the owner of the code.
• Collaborative Projects: In collaborations, setting rules regarding ownership up front is crucial. Otherwise, this matter can get very complicated.

In most countries it is possible to establish ownership rules between the actual developer and the commissioner according to preferences. The agreement must be clear and precise to ensure protection of every party’s rights.

Ownership vs. Intellectual Property

These two terms are often used interchangeably, but they don’t always mean the same thing. Ownership refers to who controls the tangible deliverables — the source code, documentation, and digital assets. Intellectual property (IP), on the other hand, is about the legal rights tied to those assets — the right to use, modify, distribute, or sell them.

A developer can write code (creating IP) but only transfer ownership once a contract explicitly assigns those rights to the client. Without that written assignment, the developer — whether a freelancer or an agency — may retain the underlying IP, even if you possess the code files.

In short: having access to the code isn’t the same as owning it. True protection comes from clear IP transfer clauses and transparent delivery practices that ensure both the code and its legal rights belong to your company.

Ownership Models Explained

At its core, code ownership refers to the legal right to use, modify, distribute, and license software. But ownership can be shared, restricted, or transferred depending on your agreements.

Here are the three main forms of software ownership:

1. Full Ownership: The client (you) owns all rights to the code, including the ability to modify, reuse, or resell it. This is the safest and most common setup for startups seeking long-term control.
2. Joint Ownership: Both the client and developer share rights. This can complicate future development or fundraising since ownership is divided.
3. Licensing Model: You receive a license to use the code, but don’t actually own it. Some agencies or productized service providers use this model.

Whenever you see the term “license,” read the fine print carefully. You might only be „renting” your own product.

When startups look for development partners, they usually go one of two routes: hiring a freelancer or partnering with a software agency. Both approaches have advantages — but they differ in terms of ownership and delivery.

Freelancers

Hiring freelancers often seems like a cost-effective way to get started. However, freelancer copyright ownership code can be a legal gray area if not properly addressed.

In many jurisdictions, when a freelancer creates something, they automatically own the copyright and intellectual property — unless the contract explicitly transfers it to the client. That means, if your agreement doesn’t include the right clause or a clear IP assignment, the freelancer retains ownership of the source code.

In practical terms, this can lead to:

• Needing the freelancer’s permission to reuse, sell, or modify the code.
• Paying extra later for full rights.
• Losing access to critical components if the freelancer disappears or becomes unavailable.

Always include explicit language in your contract stating that all intellectual property, including source code, documentation, and assets, is transferred to your company upon payment.

Agencies

Working with a software agency changes the equation — but not always automatically in your favour. Some agencies retain partial ownership or use frameworks that limit portability. Others, like Milo Solutions, follow transparent delivery practices where clients receive complete access to repositories, documentation, and code rights.

How to avoid unnecessary trouble? Before you sign the contract, ask clear questions:

• Who owns the code at the end of the project?
• Do you get full access to the repository?
• Are any third-party or proprietary libraries involved?
• What happens if you decide to end the collaboration?

The right agency should not hesitate to answer — and to document everything clearly.

Learn more about freelancer vs. agency in software development: Code Quality Assurance: Agency Standards vs. Freelance Approaches.

Code ownership is about transparency during the development process. A trustworthy software partner should deliver not only the final product, but also visibility into how it’s built. The delivery should be transparent, and the handover process agreed upon beforehand. It’s a foundation for forming good, ongoing relationships. You should look for a partner that builds trust and ensures that your startup can continue developing independently.

Remember: If you plan to raise funding, code ownership is critical. Investors perform technical due diligence, and one of the first things they check is whether your company owns the code it relies on. Any uncertainty here can delay or even kill an investment deal. Signed documentation stating clearly who owns your code is a must. It shows professionalism, maturity, and scalability — all necessary for investor confidence.

Ready to build software with a partner who knows the importance of code ownership and transparent collaboration? Book a call with Milo Solutions.

1. What’s the difference between code ownership and intellectual property?

Code ownership defines who controls the actual deliverables — the source code, documentation, and technical assets. Intellectual property (IP), on the other hand, refers to the legal rights attached to those assets, such as the right to use, modify, distribute, or sell them. You can have access to the code without owning the IP. Full protection only exists when a contract explicitly transfers both the code and the associated IP rights to your company.

2. If I pay for the code, do I automatically own it?

Not necessarily. In many countries, paying for development services doesn’t automatically transfer ownership of the source code or intellectual property. The developer or freelancer typically retains ownership unless the contract clearly assigns it to you. Always include an explicit IP transfer clause to ensure legal ownership after payment.

3. Can a freelancer reuse parts of my code for other clients?

Without a clear contract, yes — freelancers might legally reuse parts of your code, especially if they consider it their original work. A well-written agreement should prohibit this and ensure that all code, frameworks, and assets created for your project are exclusive to your business.

4. What clauses should be included in a contract to secure code ownership?

Your contract should clearly transfer all intellectual property (IP) rights to your company upon payment. It must also define access to repositories, use of third-party components, delivery terms, and confidentiality rules. These clauses prevent disputes and ensure full control of your product after the project ends.

5. Should clients have access to the code during development?

Yes. A professional partner provides full access to source repositories (like GitHub or GitLab) from the start. This ensures transparency, enables collaboration, and prevents situations where the client can’t retrieve their own product.

6. What does a transparent delivery process look like?

A transparent delivery process should include defined milestones, repository structure, and clear handover procedures. You should receive the full source code, documentation, and setup instructions — not just a compiled version.

7. What happens if my developer refuses to hand over the code?

If the developer retains legal rights, you may have limited options besides negotiating or taking legal action. To prevent this, insist on repository access during development and include a clause requiring full code delivery upon payment or project completion.

8. How does open-source software affect code ownership?

Open-source components are widely used in software projects, but they come with licensing rules that can impact how you distribute or modify your product. While you can own your proprietary code, you don’t “own” open-source parts — you’re merely licensed to use them under specific conditions.

9. What legal jurisdiction applies if my developer is abroad?

The applicable law usually depends on what’s written in your contract. If the agreement doesn’t specify jurisdiction, disputes might fall under the freelancer’s local laws. Always define the governing law and dispute resolution process clearly, preferably in a jurisdiction that protects your company’s rights. This small detail can save months of legal trouble later on.