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A Intercompany Agreement is a formal contract between two or more companies within the same corporate group that sets rules for their business dealings. Under Nigerian company law, these agreements help organizations manage internal transactions, share resources, and set clear pricing terms between related entities.

The agreement becomes especially important for tax compliance with Nigeria's Federal Inland Revenue Service (FIRS) and helps prevent transfer pricing issues. It covers key areas like service fees, intellectual property rights, and profit sharing while protecting each company's interests. Nigerian subsidiaries of multinational companies often use these agreements to document their relationships with parent companies and sister organizations.

Put a Intercompany Agreement in place when your Nigerian company starts regular transactions with affiliated businesses, especially before sharing staff, equipment, or intellectual property. This becomes crucial when setting up new subsidiaries, expanding operations across states, or working with international parent companies.

The timing is particularly important when your business faces FIRS transfer pricing audits, needs to document service charges between group companies, or manages cross-border transactions. Nigerian companies in manufacturing, technology, and oil and gas sectors often need these agreements when establishing shared service centers or implementing group-wide policies for resource allocation.

• Service Agreements: Cover shared services like HR, IT, or accounting between Nigerian group companies, with detailed fee structures and service levels
• Distribution Agreements: Manage product flow and pricing between manufacturing and sales entities within the same group
• IP Licensing Agreements: Control how group companies use shared trademarks, patents, and technology, especially common in tech and manufacturing sectors
• Management Services Agreements: Outline executive oversight and strategic support services between parent and subsidiary companies
• Cost Sharing Agreements: Specify how Nigerian group companies split shared expenses and allocate resources across operations

• Corporate Legal Teams: Draft and review Intercompany Agreements to ensure compliance with Nigerian company law and transfer pricing regulations
• Company Directors: Sign and oversee these agreements as official representatives of each participating entity
• Tax Managers: Monitor agreement terms to maintain compliance with FIRS requirements and prevent transfer pricing disputes
• Finance Officers: Implement pricing structures and payment terms outlined in the agreements
• Compliance Officers: Ensure ongoing adherence to agreement terms and regulatory requirements across group entities

• Company Details: Gather full legal names, registration numbers, and addresses of all participating Nigerian entities
• Service Scope: List specific services, resources, or products to be shared between group companies
• Pricing Structure: Document market-based pricing methods and payment terms that satisfy FIRS guidelines
• Authority Confirmation: Verify signing authority and corporate approvals needed from each entity
• Performance Metrics: Define clear service levels, delivery targets, and quality standards
• Duration Terms: Specify agreement timeline, renewal options, and termination conditions

• Party Identification: Complete legal names, registration details, and addresses of all Nigerian group entities
• Service Description: Detailed outline of services, products, or resources being exchanged
• Pricing Terms: Clear pricing methodology compliant with FIRS transfer pricing rules
• Payment Provisions: Payment schedules, currencies, and settlement methods
• Duration Clause: Agreement term, renewal conditions, and termination rights
• Confidentiality Terms: Protection of sensitive business information and trade secrets
• Dispute Resolution: Nigerian jurisdiction choice and conflict resolution procedures

A Intercompany Agreement differs significantly from an Business Acquisition Agreement. While both involve corporate transactions, they serve distinct purposes in Nigerian business law.

• Relationship Type: Intercompany Agreements manage ongoing relationships between affiliated companies, while Business Acquisition Agreements facilitate one-time purchases of entire businesses or major assets
• Duration: Intercompany Agreements typically operate continuously with renewal provisions, whereas Business Acquisition Agreements conclude once the transfer is complete
• Regulatory Focus: Intercompany Agreements primarily address FIRS transfer pricing rules and group operations, while Business Acquisition Agreements focus on ownership transfer and compliance with CAC regulations
• Pricing Structure: Intercompany Agreements use arm's length pricing for regular transactions, but Business Acquisition Agreements involve one-time valuations and purchase prices