10-Point Checklist for reviewing Intercompany Agreements

This article appears in the May issue of our International Corporate Structures Newsletter.

1. Parties – correctly described?

2. Consistency with functional analysis – especially as regards subject matter, pricing and risk

3. Term and termination – consistent with the parties’ ability to bear risk

4. Ownership of intellectual property – for pre-existing IP and IP created in the performance of the agreement

5. Vertical consistency – where the agreement forms part of a chain of supplies

6. Horizontal consistency – where the supply needs to be aligned to, or differentiated from, other similar supplies

7. Payment, default interest and currency – consistent with actual / intended practice

8. Administrative and reporting provisions – consistent with actual / intended practice

9. Governing law and formal requirements

10. Corporate benefit – the arrangements as a whole should make commercial sense for each of the participating entities