Scenario: A one-man, self-funding software developer with a software-licensing business model. Startup is self funding with no revenue anticipated for at least 1.5 years.
My query relates mainly to tax -- and here I am trying to keep costs to the bare minimum.
I need to ensure that software written by the director has copyright immediately assigned to the company. This is to avoid the possibility that director later has to assign his work to the company which may be a taxable event subject to income tax at market value of the labour. It is also to ensure that the intangible value of the work resides in the company - important for any exit strategy.
So I need some sort of assignment agreement between director and his company. Now the danger is that this is viewed as an employment contract - if this is the case, the director must be paid minimum wage. If director is paid minimum wage on actual hours worked, a substantial amount of income tax and national insurance will be payable.
Can I arrange things to avoid a taxable assignment of intellectual property AND to avoid any liability to minimum wage?
Alternatively, please tell me if I'm going too deep here and real software startups don't sweat about such legal technicalities.
Directors are not susceptible to Minimum Wage regulations AFAIK, so that is not a concern.
If you're a CEO of this company, then draw up a contract and get it notarized, saying that any work done on this particular project is copyrighted to your company.
I've never worried about this personally.