This problem occurs pretty regularly and does cause disruptions. While purchasing or selling a company are major milestones, owners can often get caught up in the excitement of closing the deal. In their eagerness to complete the transaction, some key details can fall through the cracks.
The reality is that meticulous diligence separates the pros from the amateurs.
As someone who has seen these issues arise often. It was not minor. I have seen settlements blocked and legal letters go out over this, so I want to share advice on what to watch out for when buying or selling a business.
Your POS Software Licenses do not Automatically Transfer to the new owner.
One common problem is in the software licenses. One problem is that your computer software, which in our case, and almost everyone else's, is sold under license. Now almost all businesses use software licensed to the company, not individual users. So if ABC Pty Ltd buys a business software license, ABC Pty Ltd has the right to use that software. If ABC Pty Ltd sells the business to XYZ Pty Ltd, the license stays with ABC until the software vendor is notified. The new owner won't have usage rights, which could severely impact operations. People today are very reluctant to give people they do not know access to what is often personal data.
If you've bought or sold a business, notify your software vendors to transfer licenses. Please don't assume it's automatic, or you may face disruptions as the old software owner must consent generally in writing to any license transfer.
Watch Out for These Common Issues
Over the years, I've seen many software license problems crop up during business transitions:
- Former owners demanded additional compensation for software after the sale.
- Buyers requesting refunds for software licenses that weren't transferred.
- Disputes over unpaid software debts.
- Vendors delay support until the old owner approves a transfer.
- Vendors are unsure who to contact about licenses and renewals.
Thoroughly documenting and communicating license transfers avoids headaches for everyone. Don't leave details unclear or assumes someone else will handle it because you may not like how they handle it.
Frequently Asked Software Transfer Questions
Here are some common questions about license transfers:
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Do old owners need to sign transfer forms? We prefer it but don't require it if other proof of sale is provided.
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Can transfers happen on weekends? We don't process customer changes on weekends or public holidays. Let us know if the transfer occurs at least one business day before.
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Is a new credit application required? No, we don't need a new credit application just for a transfer.
Being aware of license transfer issues goes a long way. Both buyers and sellers should confirm software ownership details to smooth the transition. Let me know if you have any other questions!
