Saya & Associates
Who owns software built by a freelancer in India?
The invoice is paid. The assumption is not checked
A company pays a freelance developer to build a feature. The invoices are cleared and the code is delivered, so the founder assumes the company owns the software.
That assumption should be checked against the signed contract, not the proposal or the invoices.
Who owns the code first
Section 2(o) of the Copyright Act includes computer programs in "literary work". Section 2(ffc) defines a computer program as a set of instructions, in any form, capable of making a computer perform a task.
Section 17 makes the author the first owner, subject to exceptions:
| Who wrote the code | First owner | Source |
|---|---|---|
| An employee, in the course of employment under a contract of service | The employer, unless agreed otherwise | Section 17(c) |
| A freelancer or agency engaged under a contract for services | The developer, until a valid assignment | Section 17 |
| A commissioned photograph, painting, portrait, engraving or film | The person who commissioned and paid for it | Section 17(b), which does not cover software |
A freelancer is not an employee just because the company directs or pays for the work. The actual relationship, the work and the agreement decide which row applies.
Payment and ownership are separate questions
An invoice records a payment. It may describe the work, but it is not a copyright assignment.
Section 19 sets the rules. An assignment is valid only if it is in writing and signed by the assignor or a duly authorised agent. It must identify the work and specify the rights assigned, the duration and the territory.
It must also specify the royalty or other consideration payable. We cover these requirements in more detail in our guide to logo ownership.
Four provisions that catch software projects
Software is built in stages, often shelved and later revived, and sold across borders. That makes these provisions matter more than they do for a single design:
| Provision | What the Act says | What to write in the contract |
|---|---|---|
| Section 18(1), first proviso | An assignment of a future work takes effect only when the work comes into existence | Cover code created throughout the engagement, and take a confirmatory assignment at each milestone or at handover |
| Section 19(4) | If the assignee does not exercise the rights within one year, the assignment is deemed to lapse, unless the assignment says otherwise | State that the assignment does not lapse for non-exercise |
| Section 19(5) and (6) | If no period is stated, five years; if no territory is stated, India | State the full term of copyright and a worldwide territory |
| Section 18(1), second proviso | An assignment does not reach a medium or mode of exploitation that did not exist or was not in commercial use when it was made, unless it specifically refers to it | Refer specifically to the ways the product may be used, licensed and distributed |
A generic line saying "all work belongs to the company" may leave questions about existing code, future deliverables, modification, sublicensing and the rights needed after the engagement ends.
Separate project work from pre-existing material
A developer may bring libraries, tools, templates or code written before the engagement. The company may need a licence to use that material inside the product, even when the new work is assigned to it.
The contract should distinguish:
- project-specific deliverables created for the company;
- the developer's pre-existing tools and materials;
- third-party and open-source components; and
- material that cannot be transferred but can be licensed.
Open-source components come with their own licence terms. Some allow almost any use with attribution; others attach conditions when modified code is distributed.
A list of dependencies with their licences, and an approval process for adding new ones, is more useful than a broad promise that the code is "clean".
What a software development agreement should cover
Before a repository is handed over, check that the agreement addresses:
- Deliverables: Which code, documentation, designs, tests and deployment materials are included?
- Rights: Which copyright and related rights are assigned, and which are licensed?
- Timing: When does the assignment take effect, including for work created in stages?
- Background materials: What may the developer reuse, and what licence does the company get for embedded material?
- Third-party components: How are dependencies identified, approved and recorded?
- Access and handover: Who controls the repositories, credentials, build pipeline and technical documentation?
- Further assurances: What cooperation is required for registration, enforcement or a later transaction?
These points should match how the product is actually built. If work is split among an agency, individual contractors and employees, review each link in the chain. A company cannot transfer rights it never obtained.
If the company hiring the developer is abroad, see our guide for UK startups hiring an Indian developer, which also covers data access.
A pre-launch ownership check
- Pick one feature. Choose a feature built by an external developer or agency.
- Find the signed agreement. Confirm it is in writing, signed by the developer, and assigns rather than only licenses the code.
- Match the deliverables. Compare the statement of work with the repository history for that feature.
- Check the terms. Confirm the rights, duration, territory and consideration, and the wording on the one-year lapse.
- List the components. Record pre-existing and open-source code in the feature, with their licences.
- Confirm control. Make sure the company holds the repositories, credentials and build pipeline.
If those records point to different answers, close the gap before a customer, investor or acquirer asks who owns the code.
Frequently asked questions
If we paid the freelancer, do we own the code?
Not by payment alone. The author is the first owner under section 17. Unless the developer was an employee under a contract of service, the company needs a written assignment signed by the developer under section 19.
Is a contractor treated as an employee for copyright purposes?
Only if the relationship is in fact a contract of service. A contractor engaged under a contract for services is not an employee just because the company directs or pays for the work.
Can we take an assignment of code that has not been written yet?
Yes. Section 18(1) allows an assignment of copyright in a future work, but it takes effect only when the work comes into existence. A confirmatory assignment at each handover closes any gap.
Can an assignment lapse if we do not use the code?
Yes. Under section 19(4), if the assignee does not exercise the rights within one year of the assignment, it is deemed to lapse, unless the assignment says otherwise. Say otherwise.
What if the assignment does not state its duration or territory?
The Act fills the gaps: five years from the date of assignment under section 19(5), and India only under section 19(6). Neither suits a product sold or licensed abroad.
The takeaway
Ownership of code is proved by a signed chain of documents that matches the repository, not by invoices. Check one feature now, and fix what does not match before it is needed.
To review a software development agreement or an ownership chain, contact Saya & Associates.
This article provides general information as at 30 September 2026. Ownership depends on the work, the parties' relationship, the contract and the applicable law. Cross-border projects may also need advice on the laws of other countries. It is not legal advice.