Arm's length principle

The Arm's Length Principle is a very important rule in business that helps make sure people are being fair when they buy and sell things to each other.

Let's say you have a toy that you really love, but you want to sell it to your friend. You don't want to be unfair to your friend by making the price too high or too low, so you make sure to sell it to them for the same price you would sell it to a stranger. This is called the "Arm's Length" price.

The same thing happens in business. If a big company wants to buy something from a smaller company that they also own, they have to make sure to buy it at an "Arm's Length" price. This makes everything fair for both companies, just like you and your friend selling your toy.

The Arm's Length Principle is like a set of rules that helps make sure everyone is being fair and honest in business. It's really important because it helps prevent one person or company from taking advantage of another person or company.