The agreement also specifies the duration of the service period, payment terms, and conditions for termination of the contract. It is crucial for the MSA to clearly establish the service provider as an independent contractor to avoid misclassification issues that could arise with the Internal Revenue Service (IRS) or under state laws. By delineating the extent of control the company has over the service provider, and vice versa, the MSA helps in maintaining the clarity of the professional relationship. This agreement is essential for companies looking to outsource management functions to improve efficiency and reduce operational costs, while ensuring that the quality of management is upheld by the service provider.
Management Service Agreement
KShs 5,600
A Management Service Agreement (MSA) is a formal contract between a company and an external management service provider. This legally binding document outlines the scope of services, terms of engagement, and the responsibilities of the management service provider. Typically, an MSA includes detailed descriptions of the administrative and management tasks to be performed, such as overseeing employee payroll, managing benefits programs, maintaining business records, and providing strategic consulting services.
