Management Services Agreement

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This Management Services Agreement is between a parent corporation and a subsidiary in which the parent will provide specific services, such as financial, planning or public affairs, to its subsidiary. This agreement sets out the specifics of the arrangement including how any compensation paid to parent corporation is calculated. This form is for use in all states.

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This Management Services Agreement is between a corporation and a subsidiary in which the parent corporation agrees to provide management services to the subsidiary for a service fee. This agreement sets out the details of this arrangement including the specific services to be provided (financial, planning, public affairs) and the formula on which the service fee is based. This type of business transaction should not be left to oral interpretation. A written Management Services Agreement will be valuable in the event there are disagreements or misunderstandings regarding the arrangement.

This Management Services Agreement includes the following provisions:
  • Parties: The names and addresses of the parent corporation and the subsidiary entering into the agreement;
  • Services: Detailed list of services to be provided by parent corporation are set out in Schedule A to this agreement;
  • Compensation: Sets out how the service fee is based (i.e., percentage of gross revenues) and the date compensation is paid to parent corporation;
  • Terms and Termination: Sets out the effective date of the agreement and how agreement may be terminated by either party;
  • Amendments: Sets out that the parties will periodically meet and amend this agreement if deemed necessary;
  • Signatures: Both parties must sign the agreement.

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This attorney-prepared packet contains:
  1. General Instructions
  2. Management Services Agreement
State Law Compliance: This form complies with the laws of all states
Number of Pages8
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#28978
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
Management Services Agreement



THIS AGREEMENT is made as of [Date of Agreement]
B E T W E E N:
[NAME OF SERVICER / PARENT], a corporation existing under the laws of [Jurisdiction of Servicer / Parent] and having its principal place of business at [Address of Servicer / Parent]
(the “Provider”)
- and -
[NAME OF SERVICE RECIPIENT] , a corporation existing under the laws of [Jurisdiction of Service Recipient] and having its principal place of business at [Address of Service Recipient]
 (the “Recipient”).
(A)   The Recipient is a wholly-owned subsidiary of the Provider;
(B)   The Recipient has a continuing need for advice and assistance in certain areas including but not limited to [Areas of Assistance (ie. manufacturing, financing, planning, accounting, tax and legal matters, public affairs, data processing)];
(C)   The Provider has considerable experience in the above areas and the Recipient wishes to draw upon such experience to obtain a variety of useful and beneficial services from the Provider, its affiliates and third parties; and
(D)   The Provider is willing to render such services to the Recipient and the Recipient desires to use such services;
NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 -    Engagement of Provider To Provide Services
1.1   The Recipient hereby engages the Provider to render services in the areas specified in Schedule “A” hereto (collectively the “Services”) throughout the term of this Agreement, and the Provider agrees to perform the Services in the interest of the Recipient during the term of this Agreement, subject to the terms and conditions stated herein. The Services shall be performed on a continuing basis without any further specific request, or at all reasonable times the Recipient calls or places an order for them with the Provider.
1.2   Apart from providing the Services, the Recipient may also request the Provider to render additional special services and the Provider undertakes to comply with such requests to the extent that it has the time, resources, manpower and expertise to do so.
1.3   For the purposes of certainty, it is understood and agreed that the term “Services” does not include any activities that constitute shareholder or control services vis-à-vis the Recipient, or that are in any other way based on the shareholder corporation relationship due to the Providers holding of a direct or indirect participation in the Recipient.
2.1   In consideration of the rendering of the Services by the Provider, the Recipient agrees to pay to the Provider, without demand, a service fee (the “Service Fee”), by the last business day of each month, a Service Fee (the “Service Fee”) equal to [Percentage of Gross Revenues upon which Service Fee is based] percent of the Gross Revenues of the Recipient during the immediately preceding month, the first payment to be made by the last business day of the second month after the effective date of the term of this agreement and the last payment to be made by the last business day of the month immediately following the month in which the term of this Agreement expires or is terminated. The parties acknowledge and agree that the Service Fee represents reasonable compensation for the provision of the Services, and that the Service Fee has been established based upon information gathered by the Provider in providing similar services to its affiliated entities over a number of years.
2.2   As used in this Agreement, the term "Gross Revenues" shall mean all revenue earned by the Recipient from its operations and business activities, and all other income of every kind and nature relating to its business; provided however, that "Gross Revenues" shall not include any sales taxes, value-added taxes, or other taxes collected by the Recipient for transmittal to the appropriate taxing authority, nor shall it include any trust funds received by the Recipient.
2.3   The Recipient shall be responsible for, and shall either bear all sales, use, excise and other similar taxes applicable to the Service Fee, by a direct payment to the taxing authority or shall reimburse the Provider for such tax or duty paid by the Provider. The Service Fee does not include value added tax, which shall be added to the Service Fee if applicable.
2.4   The Recipient shall maintain adequate books and records to substantiate its Gross Revenues invoices for the purposes of calculating the Service Fee. All such books and records may be reviewed by the Provider and its agents and nominees at all reasonable times, and from time to time.
2.5   The Recipient shall submit to the Provider unaudited balance sheets and profit and loss statements, prepared on a quarterly basis and prepared in accordance with generally accepted accounting principles applied in [Country of Recipient], Gross Revenues reports and performance reports for weekly and monthly periods and such other forms, reports, records, information, and financial statements as the Provider may designate in the form and at the times and places required by the Provider, including, without limitation, by electronic telecommunications data transmission methods, upon request and as specified from time to time by the Provider.  
2.6   All sums payable to either party under this Agreement shall be paid in United States Dollars. All payments made pursuant to this Agreement shall be paid to the Provider in United States Dollars and deposited to such bank account in the United States as the Provider shall designate.
ARTICLE 3 -    Warranty
3.1   In providing the Services, the Provider will at all times meet and maintain the highest standards of professionalism.
3.2   Under this Agreement the liability of the Provider for a material breach of the terms of this Agreement shall be limited to cases in which the Recipient establishes gross negligence or wrongful intent on the part of the Provider or of any of its agents or employees, provided however, that in no event shall the Provider be held liable for any consequential damages or for any loss of profits suffered by the Recipient or by any third party, and provided further that the amount of damages claimed in respect of all breaches that may occur during one calendar year in regard to the Recipient shall not exceed the amount of the Service Fee which the Recipient owes to the Provider for the year during which the breach occurred.
3.3   The Providers liability for torts committed by the Provider or by its agents or employees shall be limited to cases where the Recipient is able to establish that the Provider or one or more of its agents or employees have acted with wrongful intent or gross negligence. The Providers liability for torts committed by outside parties which have not entered into a service agreement with the Provider and which the Provider has engaged to help to render the Services shall be limited to that amount of damages that the Provider actually recovers from the outside party.
ARTICLE 4 -    Terms and Termination
4.1   This Agreement shall be effective on [Effective Date of Agreement] and shall remain in effect for a term of [Term of Agreement in Years (ie. three (3))] years thereafter unless terminated earlier according to the provisions set out below. Thereafter, this Agreement shall remain effective unless and until it is terminated by either party by giving the other party one (1) months prior written notice of termination.
4.2   Either party may terminate this Agreement upon written notice to the other party, with immediate effect in case of a material failure of the other party to comply with the obligations which it has assumed under this Agreement.
ARTICLE 5 -    Amendments
5.1   Both parties will meet to review and modify this Agreement periodically as to the reasonableness of its terms and the service levels and economic expectations of the parties.
5.2   If at any time the parties discover that this Agreement does not provide for a fair balance between the interest of both parties anymore, particularly if the responsibilities between the parties are modified considerably, this Agreement shall be adapted to this change of circumstance. The parties to this Agreement shall then agree upon such amendments as are required to reflect the change of circumstances.
5.3   No modification, amendment or waiver of this Agreement or any provision hereof shall be binding upon any party unless made in writing or confirmed in writing by their duly authorized representatives.
6.1   This Agreement and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of [State of Governing Law (ie. California)].
6.2   All notices, requests, demands and other communications (collectively “Communications”) under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of service if served personally on the party to whom notice is given; (ii) on the day of transmission if sent via facsimile transmission to the facsimile number given below; (iii) on the business day after delivery to an overnight courier service or the express mail service maintained by the United States Postal Service or Canada Post Corporation, provided receipt of delivery is confirmed; or (iv) on the fifth (5th) day after mailing, provided receipt of delivery is confirmed, if mailed to the party to whom notice is to be given, by first class mail, registered or certified postage prepaid, properly addressed and return receipt requested, to the party as set forth below:
Communications sent to the Provider shall be addressed to:
[Address of Provider]
Attention: PresidentFax No.: [Fax No. of Provider]
Communications sent to the Recipient shall be addressed to:
[Address of Recipient]
Attention: PresidentFax No.: [Fax No. of Recipient]
Any party may change its address by giving the other party written notice of its new address in the manner set forth above.
6.3   In the event that any term or condition of this Agreement shall be declared invalid, this Agreement shall be construed as if the same had not been inserted.
6.4   This Agreement may be executed in any number of counterparts and each such counterpart shall for all purposes constitute one agreement binding on all parties hereto, notwithstanding that all parties are not signatories to the same counterpart, provided that each party has signed at least one counterpart.
6.5   The headings and section numbers used herein are for the purpose of convenience only and are not to be used in construing the meaning or intent of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first written above.
Schedule “ADescription of Services
This Agreement covers all management services, including, but not limited to, the following:
[Describe in detail services to be provided by Provider to Recipient]

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