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Shared Services Agreement for India

Shared Services Agreement Template for India

A comprehensive agreement governed by Indian law that establishes the framework for shared services arrangements between related or unrelated entities. The document outlines the provision of centralized services, including scope, service levels, pricing mechanisms, and governance structure, while ensuring compliance with Indian regulatory requirements including the Companies Act, GST regulations, and transfer pricing rules. It addresses key aspects such as performance metrics, cost allocation, data protection, and risk management, providing a robust foundation for efficient service delivery and clear accountability.

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What is a Shared Services Agreement?

The Shared Services Agreement is essential for organizations looking to optimize operations through centralized service delivery. This document, governed by Indian law, is commonly used when companies want to consolidate support functions such as IT, HR, finance, or administrative services under a single entity to achieve economies of scale and standardization. It addresses critical aspects including service scope, performance standards, pricing mechanisms, and governance frameworks, while ensuring compliance with Indian regulatory requirements such as the Companies Act, 2013, tax laws, and data protection regulations. The agreement is particularly relevant for corporate groups implementing shared services centers, business process outsourcing arrangements, or intra-group service provisions, providing a structured approach to managing service delivery, costs, and responsibilities between provider and recipient entities.

What sections should be included in a Shared Services Agreement?

1. Parties: Identification of the service provider and recipient(s), including registered addresses and company details

2. Background: Context of the agreement, relationship between parties, and purpose of the shared services arrangement

3. Definitions: Detailed definitions of terms used throughout the agreement

4. Services: Overview of services to be provided, with detailed specifications in schedules

5. Service Levels: Key performance indicators, quality standards, and measurement criteria

6. Charges and Payment: Fee structure, payment terms, cost allocation methodology, and invoicing process

7. Governance: Management structure, reporting requirements, and decision-making processes

8. Personnel: Requirements for service delivery personnel, key personnel provisions, and HR policies

9. Intellectual Property: Ownership and usage rights of IP created or used in service delivery

10. Confidentiality: Protection and handling of confidential information

11. Data Protection: Compliance with data protection laws and data handling requirements

12. Liability and Indemnities: Risk allocation, limitation of liability, and indemnification provisions

13. Term and Termination: Duration, renewal, termination rights, and exit management

14. General Provisions: Standard boilerplate clauses including notices, assignment, and governing law

What sections are optional to include in a Shared Services Agreement?

1. Transition Services: Include when initial transition or implementation period is required

2. Business Continuity: Add for critical services requiring disaster recovery and business continuity plans

3. Audit Rights: Include for regulated industries or when significant compliance requirements exist

4. Anti-corruption Compliance: Add when services involve government interactions or high-risk jurisdictions

5. Force Majeure: Include when service delivery could be impacted by external events

6. Parent Company Guarantee: Add when financial security is required from parent company

7. Change Control: Include when services are likely to require frequent modifications

8. Third Party Rights: Add when benefits extend to group companies or third parties

What schedules should be included in a Shared Services Agreement?

1. Schedule 1 - Services Description: Detailed description of each service, including scope and exclusions

2. Schedule 2 - Service Levels and KPIs: Detailed performance metrics, measurement methods, and reporting requirements

3. Schedule 3 - Charges: Detailed pricing, cost allocation methodology, and charging models

4. Schedule 4 - Governance Procedures: Detailed procedures for service management, escalation, and reporting

5. Schedule 5 - Key Personnel: List of key personnel and their roles in service delivery

6. Schedule 6 - Technical Requirements: IT systems, infrastructure, and technical specifications

7. Schedule 7 - Security Requirements: Information security and physical security requirements

8. Schedule 8 - Exit Plan: Detailed procedures for service transition upon termination

9. Appendix A - Service Request Form: Template for requesting additional or modified services

10. Appendix B - Report Ƶ: Standard templates for performance and management reporting

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

India

Publisher

Ƶ

Document Type

Service Agreement

Cost

Free to use

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