Moving a Freelance or Agency Business Into a Company: Client Contracts, Receivables and IP

The core answer

When you stop trading as yourself and trade through a new company, nothing moves by itself. The company is a different legal person. Your client contracts, your unpaid invoices, the copyright in what you made and your team all stay with you until each is moved by a document that the right people sign.

The rule (Civil and Commercial Code and Copyright Act). Replacing a debtor with a new one cannot be done against the original debtor's will (CCC s.350), and moving a claim must be in writing and notified to the debtor to bind the debtor (s.306). Copyright is owned by the creator unless the law or the contract says otherwise (Copyright Act ss.8-10) and is only transferred by a written document signed by both sides (s.17).

Our practical view. Treat the move as four separate jobs: new contracts or novations with live clients, a written assignment for money already earned, a written copyright and file assignment from you to the company, and fresh agreements with staff and subcontractors. Do them with a cut-over date. The most common failure is simply never papering the IP, so the company owns nothing it sells.

This guide covers service businesses. For goods, stock, marketplace accounts and the tax comparison between selling personally and through a company, read selling online: moving from an individual to a company.

1. Why a contract does not "transfer" on its own

A contract binds the parties who signed it. If you registered a company tomorrow, the client would still have a contract with you. Two different things can move, and the law treats them differently.

Because a service contract is mostly your duty to deliver work, the practical route is a three-party novation agreement or a new contract with the company, after which the old one ends.

2. Getting each client's consent

Your client is entitled to choose who does its work. Some clients hired you personally for your skill; some have procurement rules.

• Approach clients before the company exists or immediately after registration, with the company certificate ready.
• Offer a short letter: the old contract ends on the cut-over date, and the same terms continue with the company. Keep price, scope and delivery terms unchanged so approval is easy.
• Decide whether you stay personally involved (for example as the named lead or a guarantor of quality). If the client wants this, say it in the novation.
• Where the client will not agree, do not pretend the work is moving. Keep serving under the old contract, invoice personally, and move later, or let the contract expire and win the renewal in the company's name.

A client that signs a new contract with the company has not necessarily released you from earlier work. If you want a clean release for past work, say so in the novation.

If a large client has told you to contract through a company first, read what to do when a big client wants a company before signing.

3. Money already earned: receivables and invoicing

Work you did and invoiced before the cut-over is your claim against the client.

• If you leave it with you, the client pays you, and you declare it as your own income. Nothing needs to be assigned.
• If you want the company to collect it, sign a written assignment of receivables and send the client a written notice, or get the client to acknowledge in writing. Under s.306 the transfer cannot be used against the client otherwise, so a client who pays you in good faith is validly discharged.
• Do not let the company simply "take over" your bank account habits. Money received for your old work is not company income unless it was properly assigned, and the tax treatment follows who really earned it.

Which entity issues the tax invoice for work in progress is a tax question and depends on whether either of you is VAT-registered and on when the service is considered delivered. There is no one answer for splitting a single job, so ask your accountant and choose one clean cut: for example, all work delivered up to the cut-over date is invoiced by you, and everything after is invoiced by the company. Avoid issuing invoices from both for the same job.

For the monthly bookkeeping and filings that begin once the company is running, see company accounting in the first year.

4. Copyright and work product: who owns what

Check ownership before you transfer anything, because you can only assign what you own.

What the law says (Copyright Act B.E. 2537).

• s.8: the creator owns the copyright in what the creator makes, subject to the Act's conditions.
• s.9: where a work is made as an employee, copyright belongs to the creator unless there is a written agreement otherwise, though the employer may publish the work for the purpose of the employment.
• s.10: where a work is made under a contract of hire of work, the person who commissioned the work owns the copyright unless the creator and the commissioner agree otherwise.
• s.17: copyright can be transferred in whole or in part. A transfer other than by inheritance must be in writing and signed by the transferor and the transferee. If it states no term, it is treated as a ten-year transfer.

What this means for you.

• Work you made for yourself (your own templates, code libraries, brand assets, a portfolio) is yours, so you should assign it to the company.
• Work you made for a client under a commission may already belong to the client under s.10, or under the contract. You cannot assign what the client owns. Check each client contract.
• Work made by employees or subcontractors is not automatically yours. Under s.9 an employee's work belongs to the employee unless agreed in writing, and a freelancer you hired is the creator unless your contract says otherwise. Where this is uncertain, get an assignment from the creator to you, then from you to the company, or have them assign to the company directly.

We do not state how s.10 applies to every type of work. Whether a particular job counts as hire of work or something else, such as a licence, is a question of fact on your contract.

5. The IP assignment from you to the company

Put it in one signed document. Cover:

1. The works: describe them by name or by category, with a schedule, and say whether future works made by you for the business are included.
2. The rights: reproduction, adaptation, distribution and communication to the public, as you intend.
3. Term and territory: say "for the full period of copyright protection, worldwide". If you leave out a term, s.17 treats it as ten years, which is rarely what the company wants.
4. Signatures: yours and the company's, by an authorised director.
5. Moral rights: a creator keeps the right to be named and to object to distortion even after a transfer, so state how credit is handled.

Brand names and logos are a separate topic: see trademark ownership when setting up a Thai company and, to register one, registering a trademark in Thailand.

If you build software, also read software development contracts and source code ownership.

6. Files, accounts and tools

Copyright is only part of the picture. List and re-home:

• Source files: design files, repositories, templates, fonts and plug-ins, with licences checked. Some licences are personal and cannot be assigned to a company.
• Domains and hosting: change the registrant and billing to the company, and keep a dated record.
• Social accounts, app-store and ad accounts: many platforms need a new account or a documented ownership change.
• Software subscriptions: move or re-buy under the company, so the company is the licensed user.
• Portfolio and testimonials: check that clients allow public use, and that the contract allows the company to use past work as a showcase.

7. Staff, freelancers and client data

Employees. Under CCC s.577 an employer cannot transfer its rights to a third party unless the employee agrees. Get each employee's written consent, and sign a new employment contract with the company that recognises continuous service. Do not treat an employee as automatically moved.

Subcontractors and freelancers. Re-paper them with the company. Include IP assignment, confidentiality, deliverables and payment terms. For the risk of disguised employment, see long-term freelancer versus employee.

Client data. If you hold clients' personal data (contact lists, user data, analytics), moving it to the company means the company becomes the controller. Tell clients and, where you act as their data processor, check the contract for what is allowed. See the PDPA compliance checklist.

Cut-over checklist

1. Register the company and open its bank account.
2. List every live client, with contract value, term and renewal date.
3. Send novation letters, or new contracts, to the clients and record each reply.
4. Fix the cut-over date and the invoicing rule for work in progress.
5. Decide, per invoice, whether it is assigned or stays with you, and send notices for assigned ones.
6. Sign the IP assignment and attach the schedule of works and files.
7. Move domains, accounts, subscriptions and licences.
8. Obtain employee consents and sign subcontractor agreements.
9. Update your website, email signature, quotes and invoices with the company's name and details.

Further reading

• Selling online: moving from an individual to a company
• What to do when a big client wants a company before signing
• Registering a company with Thai owners
• Trademark ownership when setting up a Thai company
• Software development contracts and source code ownership

A new company starts with none of your clients, money or IP; each has to be moved by a signed document, and the client's consent is the one you cannot skip.

Initial consultation is free — call +66 92 254 2045 or send us the details. Related services: contracts and documents, company registration, trademark registration and our intellectual property practice.

This guide is published by Suwanvara Law Firm — a Khon Kaen law firm established in 1986. General information only, not legal advice on a specific matter.