One-contracting party exchanges between different group companies

Indice

Such business rationale can also be applied in trade between different group companies, within which high and low added value companies coexist. The supplier group company may in fact enter into several supply contracts for the same service to the customer company, maintaining the same organisational rationale whereby some companies will maintain high added value, while others will operate as mere suppliers of the workforce.

In such cases, the ‘one-contracting party’ exchange may occur in more complex forms as it involves more than two legal entities and two, rather than one, group companies.

The two most symbolic cases are:

  • when the corporate group firm providing a service (or product) requiring both workforce and other means of production creates an internal exchange system – whether bidirectional or multidirectional, depending on the number of legal group companies involved – such that only one of the affiliated companies establishes a business relationship with the corporate group customer;
  • when the corporate group supplier sells individual inputs to the corporate group customer through several companies, which together form the good or service supplied. In such a case, there will be several supply contracts with the customer entered into by two or more of the supplier’s companies.

This trading system can be described as ‘a multi-directional one-contracting party’.


To top