Meaning
Physical and administrative management of key corporate assets, IP repositories, financial credentials, and operational records establishes practical authority over venture activities. Having operational custody determines which individual holds active access to essential software code, banking portals, and domain registries. Documenting custody prevents unauthorized asset removal or control lockouts during internal leadership transitions.
Control Boundary
Administrative authority over core infrastructure governs technical, financial, and organizational execution capacity. Maintaining operational custody requires strict credential management, multi-factor authentication controls, and detailed access logging. When a technical founder retains exclusive server passwords, the venture faces operational risk if that individual leaves unexpectedly.
Possession Chain
Documented administrative transfers track control handoffs of corporate repositories, bank access, and vendor management accounts. Verifying operational custody ensures that assets remain under corporate control during founder exits or executive turnover.
Legal Separation
Practical control over corporate systems grants immediate operational access, but administrative possession does not equal legal ownership of corporate assets. Possessing operational custody of proprietary source code or customer databases gives a founder technical leverage, yet legal rights remain vested in the corporate entity under signed IP assignment agreements. Unilateral retention of operational credentials following termination constitutes breach of fiduciary duty and triggers emergency court injunctions.
Transferring all administrative access back to designated corporate officers remains a strict prerequisite for formal founder separation.
