Royalty

AAA

DEFINITION of 'Royalty'

A payment to an owner for the use of property, especially patents, copyrighted works, franchises or natural resources. A royalty payment is made to the legal owner of a property, patent, copyrighted work or franchise by those who wish to make use of it for the purposes of generating revenue or other such desirable activities. In most cases, royalties are designed to compensate the owner for the asset's use, and are legally binding.

INVESTOPEDIA EXPLAINS 'Royalty'

Royalties are often expressed as a percentage of the revenues obtained using the owner's property, but can be negotiated to meet the specific needs of an arrangement. The use of royalties is common in situations where an inventor or original owner chooses to sell their product to a third party in exchange for royalties from the future revenues it may generate.

RELATED TERMS
  1. Solutionary

    Soluble matter comprised of salts, including gypsum, which is ...
  2. Advance Funding

    This refers to any advance made on a future commitment or payment. ...
  3. NR6 Form

    A Canada Revenue Service form that must be submitted by non-residents ...
  4. Carried Interest

    A share of any profits that the general partners of private equity ...
  5. Commission

    A service charge assessed by a broker or investment advisor in ...
  6. Patent

    A government license that gives the holder exclusive rights to ...
Related Articles
  1. Investing Basics

    Reading The Balance Sheet

  2. Forex Education

    Using The Price-To-Book Ratio To Evaluate ...

  3. Investing

    Using DCF In Biotech Valuation

  4. Entrepreneurship

    Is Buying A Franchise Wise?

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center