Intercompany Agreement Template for England and Wales

A Intercompany Agreement sets out the terms and conditions for business dealings between companies in the same corporate group. It's a crucial legal document that defines how related companies share resources, transfer goods, provide services, or handle intellectual property rights within their organization.

Under UK law, these agreements help companies demonstrate arm's length trading, comply with transfer pricing rules, and protect against tax challenges from HMRC. They're especially important for multinational groups operating in England and Wales, as they create clear audit trails and help meet Companies Act requirements for maintaining proper business records and managing group relationships.

You need an Intercompany Agreement when your business group starts sharing resources, staff, or services between affiliated companies. This becomes essential before launching shared service centers, implementing group-wide IT systems, or setting up management fee arrangements between parent and subsidiary companies.

HMRC expects to see these agreements in place for all significant intra-group transactions, particularly when dealing with transfer pricing reviews. Put them in place early - ideally before starting any new arrangements between group companies. They're particularly vital when expanding operations, restructuring your group, or establishing new subsidiaries in England and Wales.

• Inter Company Services Agreement: Used for shared services like HR, IT, or accounting between group companies
• Intercompany Credit Agreement: Governs lending and financing arrangements within the group
• Intercompany Assignment Agreement: Transfers intellectual property or contract rights between affiliates
• Intercompany Licence Agreement: Manages IP licensing and technology sharing within the group
• Intercompany Asset Transfer Agreement: Handles the sale or transfer of physical assets between related companies

• Parent Company Directors: Set group-wide policies and approve Intercompany Agreements for major transactions or strategic arrangements
• Subsidiary Company Management: Implement and oversee day-to-day operations under the agreements
• In-house Legal Teams: Draft, review, and maintain agreements to ensure legal compliance and protect group interests
• Tax Directors: Review terms to ensure transfer pricing compliance and defend arrangements with HMRC
• Finance Teams: Handle invoicing, payments, and financial reporting requirements between group entities
• External Advisers: Provide specialist input on complex arrangements or cross-border implications

• Group Structure: Map out all participating companies, their relationships, and roles in the arrangement
• Transaction Details: Document the specific services, assets, or resources being shared between entities
• Financial Terms: Determine pricing, payment schedules, and how fees or costs will be calculated
• Operational Specifics: List service levels, delivery timeframes, and performance metrics
• Compliance Requirements: Check transfer pricing rules and any sector-specific regulations
• Approval Process: Identify required signatories and internal approvals needed
• Document Generation: Use our platform to create a legally-sound agreement that includes all mandatory elements

• Party Details: Full legal names, company numbers, and registered addresses of all group entities
• Service Description: Clear outline of services, goods, or rights being transferred between parties
• Payment Terms: Detailed pricing structure, payment schedules, and invoicing requirements
• Duration & Termination: Agreement length, renewal options, and exit provisions
• Performance Standards: Specific service levels, quality metrics, and delivery timeframes
• Compliance Clauses: Transfer pricing provisions and tax compliance requirements
• Governing Law: Explicit choice of English law and jurisdiction
• Execution Block: Signature sections for authorized representatives of each party

A key distinction exists between an Intercompany Agreement and a Business Acquisition Agreement. While both involve transactions between companies, they serve fundamentally different purposes in corporate operations.

• Transaction Nature: Intercompany Agreements govern ongoing relationships between related group companies, while Business Acquisition Agreements handle one-time purchases of entire businesses or substantial assets
• Relationship Type: Intercompany Agreements work between affiliated entities under common control, whereas Business Acquisition Agreements typically involve independent parties in an arm's length transaction
• Regulatory Focus: Intercompany Agreements primarily address transfer pricing and group taxation concerns, while Business Acquisition Agreements concentrate on ownership transfer, warranties, and post-completion obligations
• Duration: Intercompany Agreements usually establish continuing arrangements, but Business Acquisition Agreements mainly cover the transaction period and immediate aftermath