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Company A (Parent Company) has an agreement with Company B (Subsidiary Company) under which Company B has to provide services to Company A. Company A is situated in Australia whereas Company B is situated in India. Company B provides maintenance services to Company A’s customers in India. Company B does not any have any contract or agreement with Company A’s customer. If any spare parts are required for giving services to Company A’s customer, then Company A provides the spare parts. Company B is given cost + 15% mark up for providing services to company A’s customer by Company A.
Please help me to understand, whether Company B is acting as an agent of Company A or not.
Thanks in advance.
Hi,
I’ve looked at this a few times and definitely cannot see it being part of the FR paper. If you are looking to determine the principal/agent then you need here to look at who is responsible for fulfilling the contract, who establishes the prices and who is exposed to the credit risk.
Thanks
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