Document background
The Intercompany Subordination Agreement is essential in corporate group structures where there are multiple layers of internal financing and a need to establish clear priority rights between different group entities. This document type is particularly relevant in Hong Kong, where complex corporate group structures are common and require careful documentation of internal financial arrangements. The agreement typically arises in contexts such as group restructuring, refinancing, or establishing new internal funding arrangements. It ensures compliance with Hong Kong corporate law requirements and provides certainty regarding the ranking of various intercompany debts, particularly important in scenarios involving external financing or potential insolvency situations. The document includes detailed provisions on payment restrictions, turnover obligations, and enforcement limitations, tailored to meet Hong Kong legal requirements and market practice.
