Proprietary Interest

Definition - What does Proprietary Interest mean?

A proprietary interest is a stake of ownership in an asset or property. Proprietary interests can represent full ownership or a percentage of ownership.

In the context of the law, those who have proprietary interests are legally entitled to the profits or other rights associated with their interests. These entitlements are legally enforceable.

Justipedia explains Proprietary Interest

Proprietary interests are commonly used in business. For example, an inventor may retain a proprietary interest through a royalty to an invention that they license out to a company. In this case, both the inventor and the company would have rights to percentages of the profits.

Proprietary interests are also frequently used in investing. Often, investors will trade entrepreneurs sums of cash in exchange for a proprietary interest in their business. This proprietary interest could be a 10% stake, a 20% stake, etc.

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