Do You Need a Software License for Your Small Business?

Confused about EULAs, SaaS terms, and open-source licenses? Here's a general, plain-English guide to software licensing for small businesses.

Every piece of software you use has license terms

Whether it's a paid subscription, a free tool, or open-source code, the software you use in your business almost always comes with license terms — an end-user license agreement (EULA), a SaaS terms of service, or an open-source license. Ignoring them doesn't make them not apply.

Commercial use restrictions are the most common trap

Many 'free' software tools are only free for personal or non-commercial use, and using them in a business context without the right paid tier or license can technically violate the terms — even if no one is actively enforcing it.

Open-source software has real legal terms too

Licenses like MIT, Apache 2.0, and GPL each carry different obligations. Some (like MIT) are permissive and low-friction. Others (like GPL, a 'copyleft' license) can require that derivative works using the code also be released under the same open license — a serious consideration if you're building a proprietary product.

If you're building or selling software, licensing works both ways

Beyond what you use, you'll also need to decide how customers are permitted to use your own software — through a EULA, SaaS subscription terms, or an API license agreement. Getting these terms wrong can limit your ability to enforce your rights or unintentionally grant more than you meant to.

When to get a professional review

For any software with a real footprint in your business — core infrastructure, anything embedding open-source code, or terms you're drafting for your own customers — a technology attorney's review is generally a smart investment before problems surface.

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