diff --git a/README.md b/README.md
index 0f1b363..b6ec82f 100644
--- a/README.md
+++ b/README.md
@@ -168,6 +168,10 @@ We plan to regularly release minor and patch versions, whenever new features are
 
 ## Licensing
 
-GNU General Public License v3.0 or later.
+This collection is primarily licensed and distributed as a whole under the GNU General Public License v3.0 or later.
 
-See [COPYING](https://www.gnu.org/licenses/gpl-3.0.txt) to see the full text.
+See [LICENSES/GPL-3.0-or-later.txt](https://github.com/ansible-collections/community.routeros/blob/main/COPYING) for the full text.
+
+Parts of the collection are licensed under the [BSD 2-Clause license](https://github.com/ansible-collections/community.routeros/blob/main/LICENSES/BSD-2-Clause.txt).
+
+Most files in the collection that are not automatically generated have a machine readable `SDPX-License-Identifier:` comment denoting its respective license(s).
diff --git a/tests/sanity/extra/licenses.py b/tests/sanity/extra/licenses.py
index fe02989..4708822 100755
--- a/tests/sanity/extra/licenses.py
+++ b/tests/sanity/extra/licenses.py
@@ -21,7 +21,7 @@ def find_licenses(filename, relax=False):
     spdx_license_identifiers = []
     other_license_identifiers = []
     has_copyright = False
-    with open(filename, 'r') as f:
+    with open(filename, 'r', encoding='utf-8') as f:
         for line in f:
             line = line.rstrip()
             if 'Copyright ' in line:
@@ -58,6 +58,7 @@ def main():
     """Main entry point."""
     paths = sys.argv[1:] or sys.stdin.read().splitlines()
 
+    # The following paths are allowed to have no license identifier
     no_comments_allowed = [
         'changelogs/fragments/*.yml',
         'tests/sanity/extra/*.json',
@@ -68,11 +69,13 @@ def main():
         'COPYING',
     ]
 
+    # Files of this name are allowed to be empty
     empty_allowed = [
         '.keep',
         '__init__.py',
     ]
 
+    # These files are completely ignored
     ignore_paths = [
         'CHANGELOG.rst',
         'changelogs/changelog.yaml',