Intercompany Shared Services Agreement

Summary

This precedent is an intercompany shared services agreement used by a Canadian parent company and its affiliates to document how one group entity provides shared functional services (e.g., legal, HR, finance, IT, tax, treasury, R&D) to other group entities and how the related costs are allocated and billed. It is designed for affiliated entities in Canada, but can be adapted for cross-border groups, including transfer pricing and indirect tax considerations. This precedent includes practical guidance, drafting notes, an alternate clause, and optional clauses. The agreement establishes (i) defined roles for "Service Provider" and "Service Recipient"; (ii) a framework for describing services by functional area; (iii) a cost-allocation methodology that distinguishes "Specifically Allocable Services" from "Apportionable Services"; (iv) mark-ups and "true-up" billing; and (v) general terms (confidentiality, independent contractor, force majeure, limitation of liability, governing law, and ...