licensing resellers

[v0ltage]

Got a quick question on licensing resellers.  Recently a close friend of mine moved to a new company, lets call them company A.  She was telling me how they have started another company, company B, with the purposes of reselling software licenses only to company A in an effort to get them at the cheapest level. 

I had heard of this practice before, but thought vendors long ago insisted on certain clauses in their contracts that if you want to resell you have to meet certain goals in an effort to prevent this?

[doctor_tran]

Depending on the type of company and where it operates across the world, this is also done create more advantageous tax treatment of licensing. Company B may be incorporated in a jurisdiction that treats licensing a certain way to reduce overall tax liability, then it can allocate that license to Company A which may operate in other locations where such a tax advantage doesn't exist. Negotiating with the vendor on the initial pricing is just the cherry on top.