Who Owns the Code? A guide to managing IP ownership when working with developers, freelancers, or using open source components

In the world of startups and small businesses, especially in tech, there's often an assumption that if you pay someone to build your app or website, then the work automatically belongs to you. But that’s not always how the law sees it. When it comes to intellectual property, especially code, it’s easy to get caught out if things aren’t clearly spelled out from the beginning.

In South Africa, copyright law protects original works, including software code. By default, the person who writes the code is the author and owner of it. The exception is when someone is an employee and writes the code as part of their job. In that case, the employer owns the code. But if you’re hiring a freelance developer, working with an agency, or even collaborating with a friend, you need something in writing that clearly transfers the rights to you. Otherwise, you might end up in a situation where someone you paid now controls what you thought was yours.

Another area that can trip people up is open source software. Developers love using open source tools because they’re free and flexible, but not all open source licenses are the same. Some allow you to use the code however you want, including in commercial products. Others have conditions attached, like requiring you to make your own code public if you build on theirs. That can be a big problem if you’re trying to protect your business model or attract investors. So it’s worth knowing what kind of licenses are being used in your project.

Working with developers also brings up the issue of who owns improvements and future versions of the product. If you don’t have a clear agreement, your developer might reuse parts of your system for other clients, or worse, refuse to hand over the full code or documentation unless you pay more. This becomes a nightmare if you want to switch teams or scale your product later.

The best way to avoid these headaches is to deal with ownership upfront. Get an agreement that says you own all the IP in the work being delivered, including code, designs, and anything else created. If open source is being used, make sure it’s declared, and confirm that the licenses won’t limit how you use or commercialise your product. Also, ask for full access to the source code, deployment instructions, and any supporting materials, not just a login to a working version.

At The StartUp Legal, we’ve seen too many SMEs lose control over their own tech simply because they didn’t know what to look out for. Ownership of code isn’t just a legal technicality — it’s core to your business value. So next time you’re working with a developer, ask the hard questions early and make sure the paperwork matches your expectations. It's your idea, your money, and your future — make sure it’s also your code.

The StartUp Legal offers expert legal services tailored for SMEs, helping you secure a winning edge. For personalized support, book a complimentary consultation: https://calendar.app.google/dStZpsDSW3RXLUn6A or email us at hello@thestartuplegal.co.za.