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When managing intercompany relationships, it is crucial to establish agreements between separate legal entities, even if they are 100% owned by the same parent company. These agreements are essential for various reasons, including legal and tax considerations. This is especially important for multinational entities, as they must adhere not only to U.S. tax laws but also to the regulations of other countries where they operate. Proper intercompany agreements help clarify how financial transactions, such as repayments, are handled and ensure compliance with all applicable legal frameworks.
