A joint venture is a method of combining the skills, resources and efforts of a group of people or entities for the purpose of achieving a common commercial objective. A joint venture is difficult to categorise, as it may take on either corporate (i.e. in the guise of a company) or partnership form.

The advantage of a joint venture is that it is a flexible arrangement which allows parties to co-operate without binding their entire undertakings with a full scale merger.

We will advise and draft an appropriate agreement based upon the type of joint venture envisaged, whether it be a partnership, a limited partnership or by investing in a new private limited company. Typically there are three different structures for joint ventures, giving varying degrees of control:

· Majority Shareholder - The majority shareholder will retain control unless there is a provision providing protection for the minority shareholder.
· Deadlock - All decisions and actions taken by the company require the agreement of all the parties.
· Minority shareholder - It is normal practice for a solicitor acting for a minority shareholder to see to protect their clients interest by giving the minority shareholder some control over certain, if not all, decisions made by the company. If there is a dispute between a majority shareholder and a minority shareholder which cannot be resolved, provision is typically made in the joint venture agreement to the effect that the minority shareholder (if s/he wishes to) may cease to be a party to the joint venture and be bought out at a fair price.

For more information please call Freephone 0800 731 2947 and ask for:

Tim Polding
Mark Fergusson