Joint Venture Agreements

Many successful businesses join together in order to achieve a common business goal. This is done via a Joint Venture Agreement which is made with two or more parties. If followed through, with independent expert legal advice, joint ventures can be positively impactful on your businesses’. However, this can only be done with vigilant negotiations, clear objectives and commitment to the same business goal. With the help of our expert commercial solicitors, our team will be able to ensure that your agreement protects all parties’ interests whilst putting you in the best possible position for the next step of your business or company.

First, you must determine which type of partnership fits with your goals:

• Ordinary Partnership – a simple agreement between all parties. It is not a legal structure but must still be registered with HMRC. If one partner leaves or passes away, the partnership is dissolved.
• Limited Partnership – this is comprised of limited partners and ordinary partners. This partnership must also be registered with HMRC. With limited partners, their liability is restricted to what they have invested in the business.
• Limited Liability Partnership (“LLP”) – this is the most formal structure. An LLP is taxed as a partnership and has a similar protection to limited liability as a limited company for the partners.

Key points you must consider before entering a Joint Venture Agreement:

• Intellectual Property rights – this is particularly significant in a Joint Venture Agreement. You must distinguish between who will own the technology rights and the intellectual property rights.
• Termination Clauses – is the joint venture going to be fixed term or have an indefinite duration? Can a Shareholder terminate the joint venture early?
• Dispute Resolution – there must be clauses to determine the resolutions for any disputes that may occur during the joint venture agreement.
• Control and Powers – this is perhaps one of the most pertinent parts of the agreement, who will have the power to appoint directors and control the board under the joint venture agreement?
• Equity – how will the equity of the joint venture company be held between the parties?
• Data Protection – when handling customer data it is important to set out which jurisdictional law the partnership is subject to.
• Jurisdiction – this clause will set out what laws are applicable to a dispute arising out of the partnership.
• Regulation – depending on the business activity, ensuring all regulations are met will be key to the partnership functioning as intended.
• Deadlines
• Confidentiality – this ensures no vital information is shared with third parties during the partnership or for a period of time after the partnership ceases.
• Definitions – have the parties and the objectives of the joint venture been defined clearly?
• Contributions – what are all the expectations of these joint venture agreements? How are the financial contributions made by each party mean when calculating profits?
• Tax – what tax considerations have been made and will the joint venture agreement contain any warranties which are relevant to the business goals that should be achieved in this joint venture?

How we can help

At The Jonathan Lea Network, our team of expert commercial solicitors can ensure that these significant clauses are reviewed, negotiated and drafted with your best interests and financial goals in mind. With an expertly drafted joint venture, you can avoid any and all risks of any uncertainties, disputes or litigation claims which can be time consuming and costly. We draft joint venture agreements to have all obligations and liabilities written clearly to protect your business and personal interests.

If you would like our assistance, please get in touch to organise a free 20 minute no obligation introductory call with one of the expert members of our team.