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Who owns the source code when you hire a developer? A guide for India

When you pay a developer or agency, who owns the code? What Indian copyright law says, the clause many contracts miss, and a handover checklist.

4 min readBy the Stackovation team

The default rule surprises most people

Many business owners assume that paying for software means owning it. Under India’s Copyright Act, 1957, that isn’t automatic. Software is protected as a literary work, and the first owner of copyright is generally its author.

Who wrote the codeWho owns it by default
Your employee, as part of their jobYou — the employer is the first owner of work made in the course of employment.
A freelancer or agency you hiredThe freelancer or agency — unless the rights are assigned to you in writing.
Open-source libraries in your productTheir original authors, under each library’s licence.

So when you hire an outside company, ownership depends on the contract. Without a written assignment, you may have the right to use the software but not to own, change or license it freely.

What the assignment must say

Under the Copyright Act, an assignment must be in writing and signed. The Act also fills in any gaps — and the defaults are not in your favour:

  • If no period is stated, the assignment is presumed to last five years.
  • If no territory is stated, it is presumed to cover India only.

For a business that plans to use its software for decades — or sell to customers abroad — that is a serious gap. A good clause assigns the rights for the full term of copyright, worldwide, including the right to modify, adapt and license the work.

It’s not only the code

A product is more than its source code. Make sure the contract and the handover cover all of this:

AssetWhy it matters
Source code repositoryWithout it, nobody else can maintain or change the product.
Designs and design filesNeeded for every future screen and change.
Domain nameWhoever owns it controls your web address and email.
Hosting and database accountsYour data lives here. You need owner access, not just a login.
App store accountsThe listing, reviews and download history belong to the account holder.
Payment gateway accountMoney goes to whoever owns it. It must be in your business’s name and KYC.
Third-party API keysSMS, WhatsApp, maps and email services should be billed to you.
DocumentationHow to set up, deploy and run the system, so any competent team can take over.

What about open-source code?

Almost every modern product uses open-source libraries — frameworks, interface components, utilities. That’s normal and good. You don’t own those libraries, but their licences let you use them.

Ask your developer to confirm that the libraries used have licences suited to commercial use — MIT, Apache 2.0 and BSD are common and permissive — and to flag anything with stricter terms.

Can the developer reuse parts of your code?

Agencies often reuse their own tools across clients — a sign-in module, a component library, deployment scripts. That’s reasonable and keeps your cost down. The contract should make three things clear:

  • Everything written specifically for your project is assigned to you.
  • Any pre-existing tools the developer keeps are licensed to you permanently, so you can keep using and changing them.
  • Your business logic, data and designs are never reused for anyone else.

Handover checklist

  • You have owner or admin access to the code repository
  • The code builds and runs from the written instructions
  • All passwords and API keys are handed over, then changed
  • Domain, hosting, store and payment accounts are in your name
  • Design source files are shared
  • Your team can back up and restore the database
  • The signed IP assignment is filed with company records

Questions people ask

If I paid for it, don’t I own it anyway?
Not automatically. Under Indian law, payment alone doesn’t transfer copyright from an outside developer. You need a written, signed assignment.
What if my developer refuses to hand over the code?
Check what your contract says about IP and handover. If there is a clear assignment, you are in a strong position. If there isn’t, speak to a lawyer — and in future, make handover part of the final milestone.
Does an NDA protect my ownership?
No. An NDA keeps information confidential; it doesn’t transfer ownership. You need both an NDA and an IP assignment.
Do I own the app if it is listed under the developer’s store account?
You may own the code, but the listing, its reviews and its download history belong to that account. Apps can be transferred between accounts, but it takes effort — so start with your own account.

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