Intercompany Settlement Agreement Template for England and Wales

An Intercompany Settlement Agreement is a legally binding document used between related companies within a corporate group to resolve financial obligations, allocate costs, or settle disputes. Under English and Welsh law, this agreement formalizes the terms of settlement between group entities, ensuring compliance with corporate governance requirements, tax regulations, and financial reporting standards. It typically includes detailed payment terms, mutual releases, and provisions for ongoing intercompany relationships.

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What is a Intercompany Settlement Agreement?

The Intercompany Settlement Agreement is essential for corporate groups managing complex internal financial relationships. It is particularly useful when resolving accumulated intercompany balances, implementing group reorganizations, or formalizing cost-sharing arrangements. Under English and Welsh law, this document must comply with specific corporate governance requirements and consider implications for financial reporting, tax efficiency, and group treasury operations. The agreement typically includes detailed settlement terms, payment schedules, and provisions for future intercompany transactions.

What sections should be included in a Intercompany Settlement Agreement?

1. 1. Parties: Details of the contracting group companies

2. 2. Background/Recitals: Context of the settlement and relationship between parties

3. 3. Definitions: Key terms used throughout the agreement

4. 4. Settlement Terms: Core settlement provisions and payment terms

5. 5. Release and Waiver: Mutual releases from claims

6. 6. Governing Law and Jurisdiction: Confirmation of applicable law and courts

What sections are optional to include in a Intercompany Settlement Agreement?

1. Tax Provisions: Additional terms covering tax implications and arrangements for tax payments or clearances

2. Confidentiality: Terms governing the confidentiality of the settlement and related information

3. Group Company Provisions: Additional terms affecting wider group companies and their obligations

What schedules should be included in a Intercompany Settlement Agreement?

1. Schedule 1: Settlement Amounts: Detailed breakdown of settlement figures and calculations

2. Schedule 2: Payment Schedule: Timeline and terms for settlement payments including installment details if applicable

3. Schedule 3: Related Companies: List of affected group companies and their roles in the settlement

4. Appendix A: Supporting Documents: Reference documents supporting settlement terms and calculations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

England and Wales

Publisher

Genie AI

Cost

Free to use

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