diff --git a/LICENSE b/LICENSE
index be3f7b28..cf1b387f 100644
--- a/LICENSE
+++ b/LICENSE
@@ -1,3 +1,55 @@
+gnubok - Swedish bookkeeping software
+Copyright (C) 2025-2026 Jakob Wennberg
+
+This program is free software: you can redistribute it and/or modify
+it under the terms of the GNU Affero General Public License as published by
+the Free Software Foundation, either version 3 of the License, or
+(at your option) any later version.
+
+This program is distributed in the hope that it will be useful,
+but WITHOUT ANY WARRANTY; without even the implied warranty of
+MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. See the
+GNU Affero General Public License for more details.
+
+----------------------------------------------------------------------
+
+EXTENSION EXCEPTION
+
+Additional Permission under GNU AGPL version 3 section 7
+
+As a special exception, the copyright holder of gnubok gives you
+permission to create extensions ("plugins") that interact with gnubok
+solely through the documented Extension API — defined in
+lib/extensions/types.ts (the Extension interface, ExtensionContext,
+and related types), lib/events/types.ts (the event bus), and the
+extension catch-all API route (app/api/extensions/ext/[...path]/route.ts)
+— without those extensions being
+considered derivative works of gnubok under the terms of this License.
+
+This means you may license your extensions under any terms you choose,
+including proprietary licenses, provided that:
+
+  1. Your extension interacts with gnubok only through the documented
+     Extension API and does not modify gnubok's own source code.
+
+  2. Your extension is clearly separable from gnubok (e.g., in its own
+     directory under extensions/, with its own manifest.json).
+
+  3. You do not copy substantial portions of gnubok's source code into
+     your extension.
+
+If you modify gnubok itself — including its core libraries, database
+migrations, API routes, or UI components — the modified version remains
+subject to the full terms of the GNU Affero General Public License.
+
+The copyright holder will not revoke this exception in any future
+release of gnubok. Note that under AGPL version 3 section 7, any party
+who redistributes gnubok may remove additional permissions from their
+copy; however, the original grant from the copyright holder remains
+in effect for copies obtained directly or indirectly from this source.
+
+----------------------------------------------------------------------
+
                     GNU AFFERO GENERAL PUBLIC LICENSE
                        Version 3, 19 November 2007
 
diff --git a/README.md b/README.md
index 60d9e8df..18da5a31 100644
--- a/README.md
+++ b/README.md
@@ -65,4 +65,4 @@ All commits require a [DCO sign-off](DCO) (`git commit -s`).
 
 ## License
 
-[AGPL-3.0-or-later](LICENSE). See [NOTICE](NOTICE) for third-party attributions.
+[AGPL-3.0-or-later](LICENSE) with an **extension exception**: third-party extensions that interact solely through the documented Extension API may be licensed under any terms, including proprietary. See [LICENSE](LICENSE) for details and [NOTICE](NOTICE) for third-party attributions.