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Intercompany Services Agreement for Management Companies (NAICS 551)

Management of Companies and Enterprises · NAICS 551 · Intercompany Services Agreement

An Intercompany Services Agreement (ISA) is essential for management companies (NAICS 551) that provide centralized services to their subsidiaries or operating entities. This agreement formalizes the terms under which the parent or management company delivers services such as executive management, HR, IT, finance, and legal support, ensuring cost allocation is transparent and defensible. For management companies, this document is critical to maintain corporate separateness, support transfer pricing compliance, and avoid IRS recharacterization. It protects the limited liability of each entity and provides a clear framework for fee calculation, invoicing, and dispute resolution. Use this tool to generate a tailored draft that reflects your specific service arrangements and governance structure.

When you need this document

When a parent management company provides shared services to a subsidiary and needs to document the arrangement for financial reporting.
When multiple subsidiaries receive centralized administrative support and costs must be allocated fairly and consistently.
When establishing transfer pricing policies to comply with IRS Section 482 and international tax regulations.
When a new subsidiary is formed and requires management services from the parent under a formal agreement.
When an existing intercompany arrangement needs to be updated to reflect changes in services or fee structure.

What the generated draft includes

Detailed description of services to be provided by the management company
Fee structure and cost allocation methodology
Invoicing and payment terms
Transfer pricing policy and compliance provisions
Intellectual property ownership and licensing terms
Term, renewal, and termination provisions
Confidentiality and audit rights
Governing law and dispute resolution mechanism

Frequently asked questions

Why do management companies need an Intercompany Services Agreement?

Management companies (NAICS 551) often provide centralized services to subsidiaries. An ISA documents these services, justifies cost allocations, and helps maintain corporate separateness, which is crucial for limiting liability and complying with tax regulations.

How does this agreement support transfer pricing compliance?

The agreement includes a transfer pricing policy (e.g., arm's length standard) and a cost allocation method, which helps demonstrate that intercompany charges are consistent with what independent parties would agree to, reducing IRS audit risk.

Can this agreement be used for international subsidiaries?

Yes, but you should consult a tax advisor to ensure compliance with local transfer pricing rules and documentation requirements. The draft includes a governing law clause that can be tailored to the appropriate jurisdiction.

Self-help document generator: you get a structured draft based on the facts you provide. It is not legal, tax, or financial advice; verify jurisdiction-specific rules before sending.