Order from ABC bill to X. Y. Z
Bobby
(Querist) 08 October 2010
This query is : Resolved
We have received a work order for a project from ABC company.
Now we received a letter from ABC stating that
Ø Bank Guarantees for advance / performance is to be issued in the ABC
Ø Invoicing is to be raised on the four subsidiary / associates companies of ABC ON Pro rata basis:
W Ltd. 20%
X Ltd. 20%
Y Ltd. 50%
Z Ltd. 10%
Now do we need separate orders from these companies or the letter from the holding company is sufficient.
Plz give your valuable opinion.
Devajyoti Barman
(Expert) 08 October 2010
Yes and no both. If these subsidiaries have got nothing to do this order then insist on any communique from them or else no separate letter is required.
Bobby
(Querist) 08 October 2010
Thanks a lot for your prompt reply,
we are not sure about how subsidiaries are concerned with this project.
Legally is it mandatory on our part to get separate order
R.Ramachandran
(Expert) 08 October 2010
So long as you have a written work order from ABC Company, you need not worry. Again since you have a written instruction from ABC Company to raise the bill on subsidiary companies, you can raise the bill accordingly. In case of any trouble (i.e. non-payment by the subsidiary companies) you can still take action against ABC Company.
Sri Vijayan.A
(Expert) 08 October 2010
You have a written work order from ABC.
What is the payment term, Is it in instalment or on completion of all the work.
If it is progressive payment, your risk is less. Bcoz, you can stop ur work at any time, if you dont get the payment from the said w,x,y or z.
If the payment on the completion of the work, it is better to get letters from them. Because later, they may argue that they are not party to the contract between you and ABC.
So to reduce the risk, i advise to get them informed
Bobby
(Querist) 09 October 2010
Many many Thanks to all the Learned Experts for the valuable opinions / advice.
