Royalty stream

A royalty stream is the series of future royalty payments expected from a licence, franchise agreement or resource royalty. Because it is a predictable flow of income, a royalty stream can be valued, sold or used as security for financing, separately from the underlying asset itself.

How BC law treats it

A royalty stream is a contractual right to future payments; it can generally be assigned, and a security interest in it can be perfected by registration under the Personal Property Security Act, RSBC 1996, c 359. Crown petroleum royalties arise under the Petroleum and Natural Gas Act, RSBC 1996, c 361 and its regulations, not under the statute regulating oil and gas operations.

What it means for your business

Selling or borrowing against a royalty stream can raise capital without giving up equity, but the buyer or lender will scrutinize the licence closely.

Risks and common mistakes

If the licence prohibits assignment or lets the licensee terminate easily, the stream may be worth far less than projected.

For the full explanation, see our entry on Royalties.

General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.