I would like to license a patent I have pending under my personal name to my SMLLC so that I can begin manufacturing and producing the product. What is required of a license agreement in regard to compensation? For example, could I license the product to my SMLLC for free, but later pay myself via an owners draw? Thank you!
1 Answer from Attorneys
You should consult with your CPA to determine the best tax strategy for this -- assuming that you are on both sides of the transaction, you have wide latitude on the terms. From the legal side, you can charge a de minimis royalty or up to the full market rate, and the royalty can be contingent on such things as the overall profitability of the LLC.