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May 24, 2011 02:54 PM

Categories: Licensing Issues

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Old Dave

Joined: 02/08/2011


I have developed some enterprise software. I am engaging with a partner who will buy 51% of my company and sell this new software alongside their existing compelmentary established software. They have exclusive rights, as they own 51%, the product is branded as theirs.  

So they will need to do so with their Sales, Marketing and Support functions intact and integrated. So my new company will supply the software, 3rd level support and consulting for custom versions and ongoing updates and improvements. 

I am trying to see how we can structure the charging for the internal service between the 2 companies.

I can  see 2 ways of doing this:

1. They charge back for all the Sales, Support and Marketing services they provide and we charge for any consulting work we do for them. We split the profit on pre agreed terms.

2. We simply charge a licence for the standard product and any 3rd level support or consulting work we do and they take the profit on theh sale to the customer.

Interested to know how other businesses have structured this. 



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