Which entity owns the data in a holding company structure?

Which entity in a group owns and can license the data?

The entity that holds the rights to the records must be the one that licenses them, and in a holding company structure that is often not the entity at the top. The legal owner of a document is generally whoever created it through its employees, or whoever acquired the rights by written agreement. So the practical test is which entity employs the people, signs the customer contracts and holds the system subscriptions. This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting.

For a fractional CFO of a multi-entity group, these answers are already in the consolidation file. That makes you the right person to map ownership before anyone is introduced.

What the law says about who owns work product

Under US copyright law, documents employees create within the scope of their jobs are generally owned by the employer. The Copyright Office circular on works made for hire explains that the employer is treated as the author and owner, while content from contractors may not be company-owned unless it is assigned in writing. Ownership can also be split and transferred: the Copyright Act's ownership section provides that rights can be transferred in whole or in part, and that an exclusive right can be owned separately.

Raw facts, customer-owned material and personal information raise different questions that copyright alone does not answer, which is why a rights review exists. The summary for a CFO: employer-created records usually follow the employing entity, and everything else follows the contract.

The four-part ownership check

Run these four checks on each entity in the group.

Common structures and what to confirm

When intercompany agreements matter

Intercompany license, cost-sharing and shared-services agreements decide whether one entity may license records another entity created or holds. If the paper is missing, the CFO may need to put it in place before a license can be signed. A tax adviser should review it, because moving rights between related entities has tax consequences that vary.

Ask these questions before an introduction:

• Which entity employed the people who created most of the records?
• Which entity signed the system contracts, and who can export?
• Do intercompany agreements assign or license records between entities?
• Do customer contracts limit use of material held by any entity?
• Does a lender, parent or minority holder need to consent to a licensing deal?
• Is the authorized sponsor, such as the owner, CEO, CFO or authorized representative, signing for the right entity?

How to present the group to SourceX

SourceX qualifies a company on size, history, data breadth and rights. In a group, present a one-page ownership map: entities, employees at peak, systems, years of history and who signs. The data inventory then lists systems by entity. The company fit checker gives a preliminary screen, and who qualifies lists the baseline of 50+ full-time employees at peak (contractors excluded).

Where a licensed entity has government contracts, check the handling restrictions on the government contractor page. Records under a legal hold stay out of scope; see litigation hold and licensing.

Insurance and strategy follow ownership

The licensing entity's insurance should be reviewed, since policies name specific entities; the cyber and D&O insurance question covers it. For the bigger picture of monetization routes, see how to monetize company data, and weigh a licensing deal against building a data product.

How partner rewards work

Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company. The reward is paid only after the buyer pays and SourceX receives its fee; an introduction, meeting or signed agreement alone does not trigger payment, and no reward is guaranteed. Check your professional rules on referral fees before you register.

When to hold off

• No entity in the group has 50+ full-time employees at peak.
• Ownership is disputed or sits with a court, trustee or assignee not involved yet.
• The records belong mainly to clients of the group.
• Nobody can authorize a license for the entity that holds the records.

Next step

Draw the ownership map for one group you advise, then read the fractional CFO referral page. When an entity looks clear, register as a partner and make the introduction.