How to Assign Founders’ Source Code to the Company in France

By Maître Arnaud Touati
06/10/2026

Reviewed and approved by Arnaud Touati (Maître), partner and co-founder of the firm

Key points

Assigning the source code developed by the founders to their company requires a written deed, in their name, that complies with the French Intellectual Property Code (Code de la propriété intellectuelle).
Article L. 111-1 of the Intellectual Property Code grants the author an exclusive right from the moment of creation, and software is recognised as a work of the mind by Article L. 112-2, 13°.
The automatic vesting exception in Article L. 113-9 applies only to employees, not to founders who are not employees or who develop the code before incorporation.
Article L. 131-3 requires each assigned right to be mentioned separately and its field of exploitation, geographical scope, duration and purpose to be defined.
The assignment can take the form of a contribution in kind to the share capital, an assignment made at the same time as the company is set up, or a later corrective deed.
In an SAS (simplified joint-stock company), valuation by a contributions auditor (commissaire aux apports) is the rule, unless the shareholders decide otherwise unanimously within the legal limits; the tax deferral under Article 150-0 B ter of the CGI (French General Tax Code) covers contributions of shares, not the contribution of software.

Assigning the source code developed by the founders to their company requires a written deed in their name that meets the requirements of the Intellectual Property Code. Without this deed, the code remains the founder’s personal property, which leaves the company legally vulnerable and weakens investors’ due diligence. The assignment should take place as soon as the company is set up, ideally in the articles of association or in an appended deed dated the same day.

Table of Contents

The principle: copyright belongs to the creator

Article L. 111-1 of the French Intellectual Property Code (Code de la propriété intellectuelle) (in French) sets out the rule: “The author of a work of the mind enjoys in that work, by the mere fact of its creation, an exclusive intangible property right enforceable against all persons.”

Software is expressly recognised as a work of the mind by Article L. 112-2, 13° of the Intellectual Property Code (in French). Protection extends to the source code, the object code, the architecture, the preparatory design material and the technical documentation.

The consequence: until an assignment has taken place, the code remains the personal property of the founder who wrote it. The company, even if founded by that same person, has no rights in the code.

Why the employee exception does not apply to founders

Article L. 113-9 of the Intellectual Property Code (in French) provides for an automatic transfer for software created by employees: “Unless otherwise provided by statute or contract, the economic rights in software and its documentation created by one or more employees in the performance of their duties or following their employer’s instructions vest in the employer.”

This mechanism applies only to employees bound by an employment contract. Founders who develop code before the company is incorporated, or as corporate officers who are not employees, do not benefit from this automatic vesting. The assignment must be express.

Formal requirements for the assignment

Article L. 131-3 of the Intellectual Property Code (in French) requires each of the assigned rights to be mentioned separately and their scope to be expressly defined:

Field of exploitation: commercial use, sub-licensing, modification, distribution.
Geographical scope: France, European Union, worldwide.
Duration: often the entire legal term of protection (the author’s lifetime, then the current calendar year and the seventy years following the author’s death, Article L. 123-1 of the CPI, Intellectual Property Code).
Purpose: the use to which the code will be put.

A generic assignment such as “all rights assigned to the company” may be challenged for lack of the required details. Technical drafting matters: each right must be listed.

When to assign: ideally on incorporation

Three approaches in practice:

Contribution in kind to the share capital: the code is contributed to the company in exchange for shares. In an SAS, this contribution is in principle valued by a contributions auditor; on incorporation, the shareholders may unanimously decide not to appoint one if no contribution in kind exceeds the amount set by decree and if their total does not exceed half of the share capital.
Assignment at the same time as incorporation: a deed of assignment dated the day of registration, for a nominal or deferred price.
Later corrective assignment: if the company already exists without having received an assignment, a corrective deed can be signed. The risk is that an investor detects the issue during due diligence and makes its investment conditional on the situation being regularised.

Contribution in kind: advantages and constraints

A contribution in kind of source code has several advantages:

Assignment without any immediate outlay by the company.
Recognition of the value of the code in the share capital, which makes the cap table more consistent.
Economic reflection of the role of the technical founders, as distinct from purely business founders.

Constraints:

Valuation: the value of the code must be justifiable. Otherwise, the tax authorities may recharacterise the transaction.
Contributions auditor: in an SAS, appointing one is mandatory, unless the shareholders unanimously decide not to on incorporation, which requires that no contribution in kind exceeds an amount set by decree and that the total value of the contributions in kind not valued by an auditor does not exceed half of the share capital (Article L. 227-1 of the French Commercial Code (Code de commerce) (in French)).
Taxation of the founder’s gain: the tax deferral under Article 150-0 B ter of the French General Tax Code (Code général des impôts) (in French) does not apply here, because it covers contributions of securities and shares, not the contribution of software.

Assignment for a price: price and tax

If the assignment is made for payment, several points need to be considered:

Price: the price may be fixed, or proportional to the revenue from exploitation. Article L. 131-4 of the CPI sets the principle of proportional remuneration, but expressly allows a lump-sum remuneration when the rights assigned relate to software.
Gain: the flat tax (PFU) applies to capital gains on the sale of securities and does not apply to the assignment of copyright; the tax treatment of the founder’s gain must be analysed case by case.
VAT: the assignment of copyright is in principle subject to VAT, unless a special regime applies.

What a deed of assignment typically contains

Precise identification of the assignor (the founder) and the assignee (the company).
Detailed description of the assigned work: name of the software, version, any deposit with the French software protection agency (Agence pour la Protection des Programmes, APP), hash of the deposit, medium handed over (USB, access to a Git tag).
List of assigned rights (reproduction, performance, adaptation, translation, modification, distribution, sub-licensing, placing on the market).
Scope: worldwide, for the legal term of protection.
Price or consideration (contribution, assignment free of charge with an express statement to that effect, or a set price).
Title warranty (garantie d’éviction) from the assignor: the assignor warrants that they are the sole author and that no third party (former employer, co-author, contractor) can claim any right in the code.
Assignment of derivative rights and any future improvements.
Waiver of the exercise of the moral right of authorship, to the extent permitted by law.

Checks to carry out before the assignment

Prior rights: check that no former employer of the founder can claim the code (a clause assigning rights to the employer, the framework of Article L. 113-9).
Co-authors: identify everyone who has contributed to the code and obtain an assignment from each of them. Interns, freelancers, occasional open-source contributors.
Third-party components: check the open-source licences used and whether they are compatible with commercial exploitation (GPL, MIT, Apache, etc.).
Prior deposit: a deposit with the APP makes it possible to prove the date on which the code existed. Recommended before any assignment.

The consequences of failing to assign

Investment due diligence blocked: funds systematically check the intellectual property chain of title. A missing assignment is a deal-breaker for the investment or leads to a condition precedent requiring regularisation.
Risk if a founder leaves: the founder can take the code and block the company’s business.
Vulnerability to competitors: the company cannot validly bring an infringement action against a copycat if it does not itself hold the rights.
Difficulty selling the company: the buyer requires an unbroken intellectual property chain of title.

Assigning the source code to the company is one of the most critical formalities of the early stage. It determines the legal soundness of the company’s main asset. Every situation is different and calls for a case-by-case analysis.