Intercompany Agreement Template for United States

An Intercompany Agreement sets the rules and terms when different companies within the same corporate group do business together. These legally binding contracts are especially important for Philippine conglomerates and multinational corporations operating multiple subsidiaries across the country.

Beyond establishing prices and payment terms, these agreements help companies comply with Philippine transfer pricing rules and Bureau of Internal Revenue requirements. They protect both parties by clearly outlining responsibilities, intellectual property rights, and how to handle disputes - which is crucial when dealing with related party transactions under local corporate laws.

Set up an Intercompany Agreement when your Philippine company starts regular business transactions with its subsidiaries, affiliates, or parent company. This becomes essential before initiating shared services, transferring assets, or establishing ongoing supply arrangements between related companies.

The timing is particularly critical when dealing with significant transfer pricing issues, cross-border transactions within your corporate group, or when BIR audits are anticipated. Having these agreements in place helps demonstrate arm's length dealings, protects intellectual property rights, and ensures compliance with Philippine tax regulations - especially during regulatory scrutiny.

• Inter Company Services Agreement: Governs shared services like IT, HR, or accounting between related companies
• Inter Company Loan Agreement: Structures financial lending arrangements between group companies
• Intercompany Cost Plus Agreement: Details pricing arrangements with markup for goods or services
• Intercompany Subordination Agreement: Establishes payment priority among related company debts
• Intercompany Agreement Between Parent And Subsidiary: Covers general business dealings between parent companies and subsidiaries

• Corporate Legal Teams: Draft and review agreements to ensure compliance with Philippine corporate and tax laws
• Board Directors: Approve and authorize significant intercompany transactions and relationships
• Finance Directors: Structure pricing arrangements and payment terms between related entities
• Tax Managers: Ensure transfer pricing compliance and documentation requirements are met
• Company Officers: Sign and execute agreements as authorized representatives of their respective entities
• External Auditors: Review these agreements during annual audits for proper related party disclosures
• BIR Officials: Examine agreements during tax assessments and transfer pricing audits

• Company Details: Gather complete legal names, addresses, and registration numbers of all involved entities
• Transaction Scope: Define specific services, goods, or resources being shared between companies
• Pricing Strategy: Document your transfer pricing methodology and markup calculations
• Payment Terms: Outline payment schedules, currencies, and settlement methods
• Duration Terms: Determine agreement length, renewal options, and termination conditions
• Compliance Check: Review BIR guidelines on related party transactions and transfer pricing rules
• Approval Process: Identify required signatories and obtain necessary board resolutions
• Documentation: Prepare supporting schedules and annexes detailing specific arrangements

• Party Details: Full legal names, registration numbers, and principal business addresses of related entities
• Scope Definition: Clear description of services, goods, or arrangements being exchanged
• Pricing Terms: Detailed pricing methodology, markup calculations, and payment schedules
• Performance Standards: Quality metrics, delivery timelines, and service level expectations
• Intellectual Property: Rights allocation and protection of proprietary information
• Term and Termination: Duration, renewal options, and exit provisions
• Dispute Resolution: Philippine jurisdiction, arbitration procedures, and governing law
• Compliance Statement: Confirmation of adherence to BIR transfer pricing regulations
• Execution Block: Authorized signatories' details and corporate seal requirements

An Intercompany Agreement differs significantly from a Business Acquisition Agreement in several key ways, though both are important for Philippine corporate transactions.

• Purpose and Scope: Intercompany Agreements govern ongoing relationships between related entities, while Business Acquisition Agreements facilitate one-time purchases of entire businesses or major assets
• Transaction Nature: Intercompany Agreements focus on regular operations and shared services, whereas Business Acquisition Agreements deal with ownership transfer and company valuation
• Duration: Intercompany Agreements typically have continuing terms with renewal options, while Business Acquisition Agreements conclude once the purchase is complete
• Regulatory Focus: Intercompany Agreements primarily address transfer pricing and BIR compliance, while Business Acquisition Agreements concentrate on SEC requirements and ownership changes
• Risk Management: Intercompany Agreements manage operational risks between related parties, whereas Business Acquisition Agreements handle transition risks and representations