Company property: Overview, definition, and example
What is company property?
Company property refers to any physical or intangible assets owned by a business, such as equipment, vehicles, intellectual property, proprietary information, or tools provided to employees for work-related purposes. In contracts or employment agreements, company property clauses outline how such property should be used, maintained, and returned, ensuring it is protected and used appropriately.
Why is company property important?
Company property is important because it supports business operations and represents valuable resources that need to be safeguarded. Including a company property clause in contracts ensures that employees, contractors, or third parties understand their responsibilities when using or handling company assets.
For businesses, these clauses protect against misuse, damage, or loss of property and help establish clear procedures for accountability, maintenance, and return of assets when required.
Understanding company property through an example
Imagine a company provides a laptop and software to an employee for work purposes. A company property clause in the employment agreement specifies that the laptop is for business use only, must be returned in good condition upon the employee’s resignation, and must not be used to access unauthorized or illegal content.
In another example, a contractor working for a construction company is given tools and equipment to complete a project. The agreement includes a company property clause requiring the contractor to return the tools in working order at the end of the contract and to compensate the company for any loss or damage caused by negligence.
An example of a company property clause
Here’s how a company property clause might appear in a contract:
“The Employee acknowledges that all equipment, tools, documents, and other assets provided by the Company (the ‘Company Property’) remain the sole property of the Company. The Employee agrees to use Company Property solely for work-related purposes and to take reasonable care to prevent loss or damage. Upon termination of employment, the Employee shall return all Company Property in good condition within [Insert Timeframe]. Any failure to return Company Property may result in deductions from final payments or legal action.”
Conclusion
A company property clause is essential for protecting business assets and ensuring they are used appropriately and responsibly. For businesses, this clause provides accountability and safeguards against misuse or loss of resources. For employees or contractors, it clarifies their responsibilities regarding the use, maintenance, and return of company property. Including a well-defined company property clause in agreements fosters transparency and helps prevent disputes.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.