How to Review Affiliate and Group-Company Usage Rights

Veda, Ops at a 22-person UK group, is about to treat “Customer and its Affiliates may use” as a group hall pass. Knowing how to review affiliate and group-company usage rights on an order form means locking a control-percent definition, splitting use from joint fee liability, and refusing Friday seats for a new Ltd until the paper says so. The holding company is the Customer.

September 2026. The three trading companies will actually use the workflow SaaS. Clause 1.4: “Customer and its Affiliates may use the Services.” Affiliate is not defined. No “more than 50% of the voting interests.” No “present or future.” Acquired Ltd completes Thursday; IT pressure for Friday logins. AE Slack: “You’re covered — Affiliates can use. Same SLA.” Typical mistake: treating Affiliate as anyone we work with.

A silent “Affiliates may use” is not a group licence. Common Paper CSA 2.1 (5 November 2024) defines Affiliate as more than fifty percent (50%) of the voting stock; a Customer Affiliate that wants the service enters a separate Order Form. Finnegan (structure): an Affiliate defined “as of the Effective Date” did not cover a company acquired five months later.

Disclaimer: Checkory provides AI support, not legal advice. Consult a qualified lawyer for binding decisions.

Which control % makes an Affiliate — not anyone we work with?

Open Affiliate in the packet — the exact files that will be signed. If the order form and MSA — the master services agreement vendors hang order forms on — has no definition, write “Affiliate undefined.” Control is a voting percent or a power to direct, not anyone you work with.

For example, Salesforce’s Global Online MSA (structure) sets control at more than 50% of the voting interests. Cooley uses “present or future” and a power to solely direct. Companies Act 2006 s.1159 is the statutory subsidiary test for England and Wales — majority voting rights or board — not a seat grant. Oracle Licensing Experts: definition is not the grant. Do: write the percent or “undefined.” Don’t: treat agencies as Affiliates.

What does “may use” do to joint fee liability?

A use-right is not a party. Circle whether Affiliates are users of the Customer account or entities that signed their own order form. Write “use only,” “jointly liable,” or “separate order” before anyone argues they sit on the same SLA.

Common Paper 2.1: a Customer Affiliate’s own Order Form is a separate agreement; Customer is not responsible for that order. IFS Master Agreement (July 2026): rights flow through Customer; Customer is liable for Affiliates’ acts. In practice, Veda’s holding company can be on the hook for overage if the grant is silent. If the holding company is not on the paper and a thin trading co will pay, that is a different hunt — parent-company see-to-it review. Do: write use-only or jointly liable. Don’t: assume they share the SLA because they can log in.

Why does a new subsidiary after signing need a change order?

Day-one seats are licensed only if Affiliate includes companies acquired during the term. Silence, or a definition frozen as of the Effective Date, excludes the Ltd you just bought. Veda’s silent Clause 1.4 is not automatic.

Finnegan (structure) froze Affiliates as of the Effective Date; a company acquired five months later did not take the grant. Until a change order or “future Affiliates that meet the 50% test from the acquisition date” exists, write “day-one seats unlicensed.” Do: get that sentence before Friday logins. Don’t: issue 12 seats on Slack.

When to write a stop-date for a departing affiliate?

Affiliate status ends when you sell the trading company. If the paper is silent, write “stop at loss of control — no day X.” A sold Ltd that keeps the tenant is unlicensed use unless you wrote a dated transition.

Salesforce colour: Affiliates only “for so long as they remain Affiliates.” IFS July 2026: if a Customer Affiliate ceases to qualify, its rights automatically terminate. WilmerHale (13 May 2025) on CA, Inc. v Allstate (filed 5 May 2025): CA seeks at least $80,000,000 after alleged two-year post-close use without a written right — pleadings, not a judgment. A 12–24 month transition is a buyer ask, not a statute. Do: put a calendar date in the log. Don’t: let a sold Ltd keep the tenant.

Why does group usage not assign the contract?

Letting a defined Affiliate use the service is not transferring the contract. The assignment clause is who becomes the party. Write “usage grant” on this hunt and leave merger consents on a different page.

IFS: the grant is non-assignable even while Affiliates may use through Customer. If the fight is assignment of the contract — who becomes the party on a merger, stock sale, or consent — that is a different hunt: assignment and change-of-control clause review. Do: keep this page on who may use. Don’t: clone consent trackers onto a usage grant.

How do you name the group, cap seats, or walk?

A group-wide grant with no named Ltds and no seat cap is a blank cheque. Name the holding company, the three trading companies, and Acquired Ltd, or walk.

SoftwareOne (28 April 2025, structure): an unspecified entity cannot use; cap users and geographies. GitLab’s licensing policy (structure): deploy can be region-blocked at 4,000 miles / 6,437 km from Sold To. If sales says “float seats across the group,” that is a different hunt — named vs concurrent seats. Do: name the five entities and cap the pool. Don’t: accept undefined Affiliate plus Friday seats and no stop-date.

Success bar before FAQ: log control-% definition → use vs joint fee liability → new Ltd automatic or change order → departing affiliate stop-date → usage not assignment → name the group / cap seats / walk, plus one sentence that would pause Friday onboarding. “Customer and its Affiliates may use” is not that sentence without a control percent and a stop-date. Walk if Affiliate is undefined, Friday seats are expected, and a sale has no stop. Optional Checkory first-pass — a machine extract before anyone reads every page — at document analysis; a human opens every High flag — a high-severity hit a human must verify. Counsel — a qualified lawyer, not the chatbot — still reads the grant.