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Joint ventures A joint venture allows two or more persons (whether legal or natural) to work together on a particular business project. They are most useful when the parties wish to retain their independence to carry out their main business activities, making a partnership unsuitable. As joint ventures are designed with a specific purpose in mind, they tend to be a relatively short term arrangement.
They are also very flexible, in that different responsibilities can be allocated to the parties according to their particular strengths. So if one business partner is strong in marketing, and the other in research, the joint venture can be arranged to make the most of both teams. Equally, though profits (and losses) are often shared equally, this is entirely up to the parties.
A joint venture can take many forms, depending on the needs of the partners. If you explain to us what you want to achieve, then we can advise you as to your options.
The most common approach is to enter a corporate joint venture. This involves the formation of a new company, with shares allocated to each business partner. The Articles of Association of your joint venture company are of vital importance. The careful drafting of these and of the joint venture agreement can ensure that the members of the joint venture have a clear understanding of their overall aims and purposes in entering this new arrangement, and that they know what they need to do to remain true to these throughout the undertaking. You should also bear in mind that as a body corporate, you will have to comply with a number of company law obligations throughout your joint venture.
Our commercial lawyers can guide you through every step of the corporate joint venture process, delivering clear and cost-effective advice. For more information regarding our experience in business start ups and company law compliance click through to our other pages. A more straightforward option is to use a contract. The obvious advantage in pursuing this route is that the business partners can begin working on the joint venture more quickly and with less paperwork. For more information on contracts and contract drafting, click through to our Contracts page.
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| Also recommended by The Legal 500 Europe, Middle East and Africa 2009 - 2010. | |
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