If you paid someone to build your system and nothing was signed about ownership, you probably do not own the code. Under UK law the person who wrote it is the first owner of the copyright, and paying for it does not change that on its own. What you almost certainly do have is a permanent right to keep using it, keep fixing it and keep improving it — which is not nothing, but it is not what most people think they bought.
This is what the law actually gives you, what happens in the two quite different ways a supplier can vanish, and the four things worth settling before the next invoice. Every legal point below is quoted from the Act, the judgment or the government guidance itself, and linked so you can read it yourself. It is general information rather than legal advice — we build these systems, we do not practise law.
Paying for it is not the same as owning it
Software is treated like a novel. The Copyright, Designs and Patents Act 1988 lists a computer program, the preparatory design material for it, and a database as literary works, so the ordinary rules of copyright apply.
Those rules are blunt. Section 11(1): "The author of a work is the first owner of any copyright in it". Section 11(2) makes one exception to that — a work made by an employee in the course of their employment belongs to the employer. There is no equivalent for the person who commissioned the work, or for the person who paid the invoice.
So if you engaged an agency, a limited company or a freelancer, the starting position is that they own the copyright in what they wrote for you. Your money bought the work. It did not, by itself, buy the rights in it.
This has been settled for a long time. The leading summary of the law, quoted approvingly in the case below, puts it in one line: "the mere fact that the contractor has been commissioned is insufficient to entitle the client to the copyright".
What a court gave a company that had nothing in writing
There is a real UK High Court decision about exactly this, on exactly this kind of system, and almost nobody writing about the subject mentions it.
In Clearsprings Management Ltd v Businesslinx Ltd (14 July 2005), a company had commissioned a web-based management system for its own operations, fallen out with the developer, and asked the court who owned it. The judgment records at paragraph 6 that it was common ground "that the first owner of the copyright was BL" — BL being the developer, not the company that had paid for it and run its business on it.
The company argued it must have been an implied term that ownership would be transferred. The judge disagreed, and explained why in a sentence worth understanding: where a court has to fill a gap in a contract, it implies the minimum that makes the deal work, not the most generous reading. Having rejected an implied exclusive licence, he found "there was no implied obligation to assign".
What the company got instead, at paragraph 53, was a licence that is "perpetual and irrevocable and royalty free", under which it was "entitled … to repair and maintain and upgrade" the system for its business. But it was non-exclusive and personal, "with no right to sub-licence".
In plain terms, with nothing signed, you can expect to:
- keep running it, for as long as you like, without paying again for the right to
- have it fixed and improved, including by somebody else
- not sell it, licence it or hand it to another business
- not stop the developer reusing the general parts of it for other clients
That is a better outcome than most people expect. It is also an outcome that cost a High Court case to establish. One signed page at the start would have cost nothing.
A transfer has to be in writing, and signed
If you want the copyright itself rather than a licence, there is a formality and it is strict. Section 90(3): "An assignment of copyright is not effective unless it is in writing signed by or on behalf of the assignor".
A reassuring answer on a call is not an assignment. "You'll own it all when it's paid off", said in a meeting and believed by both sides, is not an assignment. It has to be written down and signed by the party giving it up.
This is a small ask, and a supplier's reaction to it tells you a lot. One clause is enough: the supplier assigns to you all copyright in the software written for you, taking effect on final payment.
The ending nobody plans for: struck off, not bust
Ask what happens if a supplier disappears and everyone pictures insolvency — administrators, creditors, a formal process with someone to write to. For a one- or two-person software company that is not the usual ending. The usual ending is quieter: it stops filing accounts, and Companies House strikes it off. The company is dissolved.
That matters because of section 1012 of the Companies Act 2006: when a company is dissolved, all property and rights vested in it are "deemed to be bona vacantia" and belong to the Crown, or to the Duchy of Lancaster or the Duke of Cornwall.
Copyright is property. So the copyright in the system your business runs on does not evaporate, and it does not pass to you. It becomes Crown property, and to get it you have to buy it from the government.
The published guidance for doing that sets out what is involved. The minimum consideration "for a copyright £1,000", with VAT on top. The Bona Vacantia Division's own costs of "£300 plus VAT for each asset". Sale at open market value, which you may have to fund a valuation to establish. No title guarantee and no warranties of any kind. And the line that should focus the mind: "There is no guarantee that you will be given the opportunity to buy it". That guidance applies to England and Wales; Scotland and Northern Ireland have separate arrangements.
So the cheapest possible version of this problem is somewhere north of £1,300 plus VAT and a wait, and it is not certain to be available to you at any price. All of it avoidable by a signed clause at the beginning.
Escrow is usually the wrong answer at this size
Search for any of this and you will be sold source-code escrow: a third party holds a copy of the code and releases it to you if the supplier fails. It is a real product and it solves a real problem, but check the arithmetic against the size of your system.
One UK provider, LE&AS, publishes its prices openly: a standard agreement is £750 to set up and £595 a year, and the version for hosted software is £1,250 and £950 a year. On a six-figure platform that is sensible insurance. On an internal system that cost a few thousand pounds to build, you would be paying a significant fraction of the build price every year, indefinitely, to protect against one particular ending.
The cheaper arrangement covers more endings anyway: have the assignment signed, and have the code sitting in a repository your own company controls. Then there is nothing to release, because you already have it.
The other half of the question is your data — and it is not a copyright question
Everything above is about the code. The thing that actually strands a business is usually the records, and that is a different problem with a different answer.
Your customers, jobs, leases, invoices and dates are not really a copyright issue. What decides whether you can reach them is far more mundane: whose name the accounts are in. If the hosting, the database, the domain and the payment provider all sit inside your supplier's account, then when the supplier goes so does the only login.
Data protection law helps less here than people assume. The right to data portability is an individual's right over their own personal data — the ICO is explicit that it "only applies to personal data", and only to information that person provided. It is not a route for a limited company to pull its own lease schedule or job history out of a supplier's system. That is a contract question, and if the contract is silent it is a goodwill question.
Meanwhile the obligation to keep those records stays with you. A limited company must keep records for six years from the end of the last financial year they relate to. Nothing obliges your supplier's arrangements to last that long.
The fix is administrative rather than legal, and it costs nothing if you do it on day one: every account in your own company's name, with you as the owner and the supplier added as a user.
Four things to settle before the next invoice
- Ownership, in writing, signed. One clause assigning the copyright to you on final payment. If a supplier will not put that in writing, that is the answer to a different question.
- Every account in your name. Domain, hosting, database, email, payment provider. Add your supplier as a user; never let them be the owner.
- A copy of the code you can actually reach. A repository your company controls, that somebody other than the supplier can open today.
- An export you have actually run. Not a promise of one. Run it, open the file, and count a column you already know the answer to.
The fourth is the one people skip, and it is the one that fails quietly. We have written separately about why, having found two of our own importers reporting success while silently dropping a column.
Why we wrote this from the wrong side of the table
We are a small supplier. Everything above is a list of protections against people like us, and we would rather publish it than have a client discover it at the worst moment.
The honest reason is that the alternative is worse for us too. A buyer who is quietly worried about what happens if we vanish never raises it, and it comes out as hesitation instead. Answering it in public, with the actual sections and the actual case, is faster than being asked.
If you are weighing up a proposal from anyone — us included — and you want a second pair of eyes on what it says about ownership, hosting and getting your data out, send it over. We will tell you what it actually commits to, which is not always what it appears to say.