Domain Name Registration and Ownership
In today’s world, it’s difficult for any business to function without a website. Some companies will rely on their site to market and sell products while others will utilize it to engage prospective customers. However you put your site to use, it’s important to know a bit about domain name registration and ownership.

Back in 2011, the Ontario Courts confirmed domain names as legal property, which means they can be owned by any legal entity. For startups, understanding how to secure ownership of, and properly register, their preferred domain name is crucial.

Minimizing the Potential for Disputes

Setting up the legal structure of a startup can be an intricate process. It’s also a time of great excitement. As such, it can be easy to place too much faith in one or more partners when there is so much focus on bringing an innovative new idea to market.

Typically, most startups register their domain name under the personal name of a founder or co-founder. While this can suffice, if the founder is committed to the startup’s long-term success, it can also pose significant issues if a dispute between co-founders arises and the registrant of the domain name decides to leave the business.

In this case, the registrant will either need to agree to transfer ownership of the domain name to the company he or she is leaving, or that company may be forced to purchase a new domain name and risk altering their entire brand and marketing approach in order to compensate for the change.

Recent Case Study

In a recent dispute involving co-founders of a mold inspection and removal business, the co-founder responsible for running the company’s operations initially purchased a number of domains for the business, and although he used the company credit card to do so, he utilized his own name as the registrant.

When he decided to leave the business almost a year later, he took domain name registrations and passwords along with him. Because there was no evidence that the domain names had been registered in bad faith, or were being used illegitimately, the other co-founder’s attempt to secure transfer of the domain names via court proceedings was unsuccessful, at least initially.

A Tip for Proper Registration

While the court proceedings in the aforementioned case eventually resulted in a settlement that returned the domains to the original company, the dispute undoubtedly required more money, and time in court, than either co-founder would’ve most likely preferred.

In order to avoid such a conflict, it’s important for the operating company itself to own the domains and website, rather than an individual that may be temporarily associated with the business. The hosting provider should allow the business to be listed as the registered owner, although it might be necessary to enter into an explicit agreement that states the domain name as assigned to the specific business name.

Benefits of a Company-Owned Domain Name

Having the company name listed as the registrant will ultimately make life easier if you ever decide to switch web hosts. It also allows you to maintain continuity throughout your company’s lifetime. The right domain name can significantly help your brand stick in the minds of targeted consumers.

When forming a startup, it’s essential to pay attention to the legal nuances that can come back to bite you if ignored. Registering a domain name under the proper name may seem simple, but it’s a step that will ultimately save you crucial time and energy in the future.

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Posted by: DSR
Thursday, October 1, 2015
Tag: Legal
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