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

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