Parent company clause: Copy, customize, and use instantly
Introduction
A parent company clause outlines the relationship between the parties in terms of ownership, control, or influence by a parent company. This clause specifies the obligations, rights, and responsibilities of the parent company concerning its subsidiary or affiliate under the Agreement. It ensures clarity regarding the role of the parent company in the performance and obligations under the Agreement.
Below are templates for parent company clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard parent company clause
This version includes general provisions for parent company obligations.
The [Company] represents that it is a subsidiary of [Parent Company]. The [Parent Company] agrees to provide reasonable assistance to the [Company] in fulfilling its obligations under this Agreement, including financial support or other resources as necessary to ensure the [Company]’s performance.
Parent company clause with guarantee by parent company
This version includes a guarantee by the parent company.
The [Parent Company] guarantees the performance of all obligations and liabilities of the [Company] under this Agreement. In the event that the [Company] fails to meet its obligations, the [Parent Company] shall be responsible for fulfilling those obligations.
Parent company clause with financial backing
This version includes financial backing by the parent company.
The [Parent Company] agrees to provide financial backing to the [Company] for the duration of this Agreement. This backing includes ensuring the [Company] has sufficient resources to meet its obligations, including payments to contractors and service providers.
Parent company clause with reporting requirements
This version includes reporting requirements for the parent company.
The [Company] agrees to provide quarterly financial reports to the [Parent Company] regarding the progress of the project and the fulfillment of its obligations under this Agreement. These reports will include financial statements and project status updates.
Parent company clause with control over subsidiary actions
This version includes control over subsidiary actions.
The [Parent Company] retains full control over the [Company] and its actions under this Agreement. Any significant decisions regarding the execution of this Agreement, including scope changes or financial commitments, will require prior approval from the [Parent Company].
Parent company clause with compliance obligations
This version includes compliance obligations for the parent company.
The [Parent Company] ensures that the [Company] complies with all relevant laws and regulations regarding this Agreement, including any tax, labor, and environmental laws. The [Parent Company] agrees to assist the [Company] in ensuring full compliance.
Parent company clause with obligations for material breaches
This version includes obligations for material breaches.
In the event that the [Company] commits a material breach of this Agreement, the [Parent Company] agrees to immediately step in to resolve the issue, including the payment of any damages or penalties, and to ensure the [Company] fulfills its obligations under the Agreement.
Parent company clause with liability for subsidiaries
This version includes liability for subsidiaries.
The [Parent Company] will be held jointly liable for any liabilities arising from the [Company]’s failure to perform under this Agreement. This includes any legal, financial, or reputational damage caused by the [Company]’s breach of contract.
Parent company clause with termination rights for parent company
This version includes termination rights for the parent company.
The [Parent Company] has the right to terminate this Agreement if the [Company] is unable to meet the key obligations outlined within this Agreement, including project milestones, timelines, or financial commitments. Such termination will be subject to the terms outlined in Section [X].
Parent company clause with support for dispute resolution
This version includes parent company support for dispute resolution.
The [Parent Company] agrees to participate in any dispute resolution process related to this Agreement and will cooperate fully with the [Company] and the [Investor] to resolve any conflicts or issues arising from the performance of the Agreement.
Parent company clause with guarantee of subsidiary’s performance
This version includes a performance guarantee by the parent company.
The [Parent Company] guarantees the timely performance of all obligations under this Agreement by the [Company]. In the event of non-performance, the [Parent Company] shall be directly responsible for fulfilling the [Company]’s obligations.
Parent company clause with tax-related responsibilities
This version includes tax-related responsibilities for the parent company.
The [Parent Company] will ensure that the [Company] complies with all tax obligations arising from this Agreement. If the [Company] fails to comply with applicable tax laws, the [Parent Company] will be liable for the payment of any penalties or outstanding taxes.
Parent company clause with approval rights for parent company
This version includes approval rights for the parent company.
The [Investor] acknowledges that certain decisions under this Agreement, including budget allocations, major scope changes, and vendor selections, are subject to prior approval by the [Parent Company]. The [Investor] agrees to submit these decisions for approval before proceeding.
Parent company clause with responsibility for subsidiary’s liabilities
This version includes responsibility for subsidiary’s liabilities.
The [Parent Company] accepts responsibility for any liabilities incurred by the [Company] in the performance of this Agreement. The [Parent Company] shall promptly cover any financial, legal, or other obligations arising from the [Company]’s failure to perform.
Parent company clause with involvement in key decision-making
This version includes involvement in key decision-making.
The [Parent Company] will be directly involved in key decision-making processes related to this Agreement, including project scope changes, major financial commitments, and other critical business decisions. The [Company] will consult the [Parent Company] prior to making such decisions.
Parent company clause with joint responsibility for project delivery
This version includes joint responsibility for project delivery.
The [Parent Company] and the [Company] shall work together to ensure the successful delivery of the project under this Agreement. Both entities agree to share joint responsibility for meeting key milestones, timelines, and deliverables.
Parent company clause with amendment approval rights
This version includes amendment approval rights.
Any amendments to this Agreement, including changes to the scope, budget, or timeline, must be approved by both the [Company] and the [Parent Company] in writing before implementation.
Parent company clause with financial transparency
This version includes financial transparency.
The [Company] agrees to maintain financial transparency and provide the [Parent Company] with access to financial records and project-related documents. The [Parent Company] will review these records regularly to ensure proper financial management under this Agreement.
Parent company clause with shared financial responsibility
This version includes shared financial responsibility.
Both the [Parent Company] and the [Company] agree to share responsibility for any project-related financial obligations under this Agreement. This includes the allocation of funds, payment of invoices, and any cost overruns or adjustments that arise during the project.
Parent company clause with corporate guarantees for funding
This version includes corporate guarantees for funding.
The [Parent Company] guarantees the provision of adequate funding to the [Company] to ensure the proper execution of this Agreement. In the event that additional funding is required, the [Parent Company] will provide such funds.
Parent company clause with assistance for regulatory compliance
This version includes parent company assistance for compliance.
The [Parent Company] agrees to assist the [Company] in complying with all relevant regulatory requirements related to the services provided under this Agreement. This includes providing guidance on tax, labor, and environmental compliance.
Parent company clause with full oversight of subsidiary actions
This version includes full oversight by the parent company.
The [Parent Company] shall have full oversight of the [Company]’s actions under this Agreement, including reviewing and approving key decisions, such as changes to the project scope or budget, before any action is taken.
Parent company clause with responsibility for subcontractor performance
This version includes responsibility for subcontractors.
The [Parent Company] is responsible for ensuring that any subcontractors engaged by the [Company] meet the required performance standards under this Agreement. The [Parent Company] will be liable for any failures by subcontractors to fulfill their obligations.
Parent company clause with tax indemnity
This version includes tax indemnity.
The [Parent Company] agrees to indemnify the [Investor] against any tax liabilities that arise from the [Company]’s failure to comply with applicable tax laws under this Agreement, including any penalties, fines, or interest charges.
Parent company clause with corporate social responsibility oversight
This version includes corporate social responsibility (CSR) oversight.
The [Parent Company] will ensure that the [Company] complies with its corporate social responsibility policies in the execution of this Agreement. The [Company] will follow the ethical standards set by the [Parent Company] in all operations related to the project.
Parent company clause with guarantee of compliance with project goals
This version includes a guarantee of compliance with goals.
The [Parent Company] guarantees that the [Company] will meet all project goals, including deadlines, deliverables, and performance standards, and will assume responsibility for any deviations or delays caused by the [Company].
Parent company clause with reporting requirements for financial performance
This version includes financial performance reporting.
The [Company] shall report its financial performance, including profit and loss, revenue, and costs, to the [Parent Company] on a quarterly basis. These reports will allow the [Parent Company] to assess the [Company]’s ability to meet its obligations under this Agreement.
Parent company clause with performance monitoring and corrective action
This version includes performance monitoring.
The [Parent Company] will monitor the [Company]’s performance throughout the term of this Agreement. If performance standards are not met, the [Parent Company] will take corrective actions, including adjusting resources or providing additional support to the [Company].
Parent company clause with joint liability for claims
This version includes joint liability for claims.
The [Parent Company] agrees to share joint liability with the [Company] for any claims arising out of this Agreement, including claims related to breach of contract, negligence, or damages. Both parties will work together to address any claims made by third parties.
Parent company clause with financial backing for operational costs
This version includes financial backing for operational costs.
The [Parent Company] agrees to provide financial support to the [Company] for operational costs related to this Agreement. This includes providing working capital, covering unforeseen expenses, and ensuring the [Company] has adequate funds to perform its obligations.
Parent company clause with tax treatment of group profits
This version includes tax treatment of group profits.
The [Parent Company] will ensure that any profits derived from the project under this Agreement are treated according to the group’s tax structure. Any taxes arising from the project profits will be reported in the [Parent Company]’s consolidated tax filings.
Parent company clause with rights to approve key personnel
This version includes approval rights for key personnel.
The [Parent Company] reserves the right to approve any key personnel assigned to this project. The [Company] will submit a list of proposed personnel for approval, and no personnel may be assigned without the prior consent of the [Parent Company].
Parent company clause with guarantee of subsidiary’s solvency
This version includes a solvency guarantee.
The [Parent Company] guarantees that the [Company] will remain solvent and able to meet its financial obligations under this Agreement. If the [Company] becomes insolvent, the [Parent Company] agrees to assume responsibility for all outstanding liabilities.
Parent company clause with oversight of subcontracting arrangements
This version includes oversight of subcontracting arrangements.
The [Parent Company] will oversee any subcontracting arrangements made by the [Company] under this Agreement. The [Parent Company] must approve all subcontractors and will ensure that all subcontractors comply with the terms of this Agreement.
Parent company clause with provision of strategic direction
This version includes provision of strategic direction.
The [Parent Company] will provide strategic direction to the [Company] regarding the project under this Agreement. The [Parent Company] will ensure that the project aligns with the overall business goals of the [Parent Company].
Parent company clause with responsibility for subsidiary’s regulatory compliance
This version includes responsibility for regulatory compliance.
The [Parent Company] will be responsible for ensuring that the [Company] complies with all applicable regulatory requirements, including environmental, health and safety, and tax laws, in the execution of this Agreement.
Parent company clause with requirement for parent company approval of financial transactions
This version includes approval of financial transactions.
The [Investor] acknowledges that certain financial transactions, including those exceeding [X] amount, will require the prior approval of the [Parent Company]. This includes any payments made to third parties or adjustments to the project’s financial plan.
Parent company clause with financial guarantees for project completion
This version includes financial guarantees for project completion.
The [Parent Company] agrees to provide a financial guarantee for the completion of the project under this Agreement. The guarantee will ensure that the [Company] has sufficient funds to complete all deliverables and meet any contractual obligations.
Parent company clause with joint decision-making on project amendments
This version includes joint decision-making.
The [Parent Company] and the [Company] agree that all major amendments to the project scope, deliverables, or timeline must be jointly approved by both parties. The [Investor] will consult the [Parent Company] before any amendments are made to the project.
Parent company clause with responsibility for debt obligations
This version includes responsibility for debt obligations.
The [Parent Company] assumes responsibility for any debt obligations incurred by the [Company] under this Agreement, including any loans, advances, or other forms of credit provided to the [Company] for the performance of its duties.
Parent company clause with financial reporting to parent company
This version includes financial reporting requirements.
The [Company] will provide detailed financial reports to the [Parent Company] on a quarterly basis, including project budgets, revenue, expenses, and cash flow. These reports will allow the [Parent Company] to monitor the financial health of the project.
Parent company clause with corporate governance oversight
This version includes governance oversight.
The [Parent Company] will have oversight of the corporate governance practices of the [Company] as it relates to this Agreement. The [Parent Company] will ensure that the [Company] adheres to proper governance practices, including ethics, compliance, and risk management.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.