JointVent&Pship Layerslider

Joint Ventures and Partnerships

Joint ventures can be very complex transactions that often carry a significant strategic importance to all parties involved. They can offer significant opportunities in terms of accessing new markets, sharing risks and delivering economies of scale. However, if not implemented and documented accordingly, they can also lead to a loss in shareholder value or shareholder disputes.

The Corporate team at MKB Law take the time to get a clear understanding of the parties’ commercial objectives from a joint venture arrangement in order to provide bespoke, specialist advice. The team has significant experience in delivering structures, designed to ensure that the commercial objectives of the joint venture partners are achieved and their commercial interests are adequately protected.

We can advise on all aspects contained within joint venture agreements as well as incorporate new joint venture companies with bespoke articles of association and shareholder agreements that sufficiently document the parties’ rights and obligations from the outset of the venture.

Similarly, MKB Law can advise on all manner of partnerships from general partnerships to limited liability partnerships (LLPs). The Corporate team have sound knowledge on the principles of equity and common law that are fundamental to partnerships. The team have wide-ranging experience in drafting of partnership agreements as well as variations to partnerships and dissolutions and can provide strategic, tailored advice to clients in relation to same.

What kind of joint ventures are there?

Legally speaking, a joint venture can take a number of forms including:

  • Simple contractual relationships such as distribution agreements;
  • The setting up of a specific joint venture company for the purposes of a specific joint venture project such as property development;
  • The merging of two businesses.

What is the best way to structure a joint venture?

Often it is considered sensible to incorporate a limited company for the purposes of a joint venture. This gives a degree of limited liability for the parties given that their liability only extends to the amount on paid on their shares as shareholders.

However, this may not always be preferable, particularly in instances where significant assets are transferred into the joint venture company which may attract unwanted tax consequences, in which case a limited liability partnership may be preferable.

How much control will I have over a joint venture?

The amount of control that you have will depend entirely on what has been agreed and documented within the joint venture agreement at the outset. It is common for parties to put a shareholders agreement in place from the outset of the relationship which deals extensively with all rights and obligations of each party, including how disputes are to be handled.

What is the difference between a partnership and joint venture?

Generally speaking, a joint venture is usually limited in scope to one specific project or by duration in time frame, a profit may or may not be a key consideration or goal. Whereas, partnerships are formed with a view to carry on a long-term goal such as running a business with a view to making a profit.

 

Gordon McElroy
Director
gmce@mkblaw.co.uk
028 9099 3111

Lynsey Henderson
Solicitor
lh@mkblaw.co.uk
028 9099 3117

Jose Lazaro
Solicitor
jl@mkblaw.co.uk
028 9099 3114

Wattey Kemnay
Legal Executive
wk@mkblaw.co.uk
028 9099 3153

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