What is a licence-back arrangement when a business assigns IP to a holding company?

A licence-back arrangement is a two-step structure where an operating business first assigns ownership of its intellectual property — trademarks, copyright, patents — to a separate holding company, and the holding company then licenses that same IP back to the operating business for its ongoing use. Businesses use this structure for a few common reasons: it can isolate valuable IP from the operating company's day-to-day liabilities, so a lawsuit or creditor claim against the operating business is less likely to put the IP itself at risk, and it can support a cleaner corporate structure ahead of financing, franchising, or an eventual sale.

The licence-back agreement functions like any other IP licence: it should define the scope of permitted use, any royalty or fee, quality-control obligations if a trademark is involved, and what happens to the licence if the operating business is sold or the holding structure changes. Setting this up correctly generally requires coordinated corporate, tax, and IP legal advice, since the assignment itself is a taxable transfer and the ongoing licence has its own tax and legal implications — this is not a do-it-yourself restructuring.