Intercompany Fees After Admitting a New Partner

Revisit the fee when ownership or benefits change. A charge that moved money between wholly owned businesses can have a different economic impact after an outside owner joins.

A business-owner scenario

A founder owns a marketing company and an operations company. A minority investor buys into operations, which continues paying a management fee to marketing. The investor needs a clear description of services and pricing, while the tax records need the same support.

Illustrative scenario, not a client result.

Work through the transaction

Compare services before and after the ownership change.
Identify approval and conflict provisions in governing documents.
Separate compensation, service fees and distributions.

The mistake that changes the result

A historical fee percentage does not automatically remain appropriate when the parties' interests and workloads change.

Records that resolve the question

Operating agreement.
Service contracts.
Fee history.
Evidence of work performed.

The decision to document

Ask counsel to address required approvals and the advisor to evaluate the pricing and reporting. Document the prospective method and review actual service delivery rather than simply carrying forward last year's journal entry.

Which fact changes the answer?

A fee that benefits the founder's wholly owned company now also affects the investor's return. Make the approval and pricing process visible. Separately identify any work that benefits the founder personally rather than the company paying the charge.

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Sources and scope

General educational information prepared with AI assistance. No individual professional review is represented. Apply the relevant tax-year rules to the actual records. Editorial policy · AI disclosure.

A new partner joined one company. Can I keep our old intercompany fees?