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  • 1.5 Copyright - Personal Property or Property of a Company
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The logo of the Helsinki based company Bolder (left), a screen shot of a project designed by them.


Copyright can be an entrepreneur's personal property or the property of a legal person, such as a company, association or co-operative. In Finland, a legal entity is registered in the registry of the National Board of Patents and Registration in Finland and the legal entity has an identifying business ID. Also in other countries, a legal entity is registered, has a registration code and / or a Value Added Tax (VAT) code.  In Finland, the VAT number and company business ID are the same number sequence.

Ideas cannot be recorded as property in the company's balance sheet. However, processed IPR assets, such as a design right, can be recorded as property in the balance sheet.  Accounting law must be observed in evaluating IPR assets.

Intellectual Property  may either be the entrepreneur's personal property or part of the company's property. For the property to belong to the company, the copyright holder must submit a written copyright transfer agreement, and the intellectual property must be recorded as property in the company's balance sheet.   Whether the intellectual property belongs to a natural or legal entity, affects the taxation of the profit made from the sale of the intellectual property.  

Mere notice to the tax authorities may  not be  enough for the treatment of royalties as corporate income. An example of this is the Supreme Administrative Court case T 3033 of 24th Nov, 2000: A  company had reported royalties from copyright protected materials as company income. The Supreme Administrative Court examined whether the royalties reported in taxation should be seen as the principal shareholder's personal  income or income of the company. Royalties had been paid for the copyrighted materials created by the company's principal shareholder. Assistants were used to some degree in the creation of the licensed materials.  The company didn't have premises or fixed assets and the company had not been marketed. The Supreme Administrative Court held that the income was not income of the company, but personal income of the principal shareholder.  [1]

Copyright is a right that belongs to the creator of the work and is thus based on the personal skills and competence of the author. The copyright, which serves as the basis of the royalties, still belonged to the company's principal shareholder therefore copyright-related financial rights were not transferred to the company.  In the acquisition of the royalties in question, a limited company form was not necessary and, as far as royalties were concerned, the scope and publicity of the company's activity was not such, that there would have been grounds for the allocation of royalties.  Consequently, the company's principal shareholder was the correct beneficiary of the royalty.

Notes and References

[1] Supreme Administrative Court case T 3033 of 24th Nov, 2000