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Joint ventures allow two or more parties to work together on a project or undertaking. Advantages of forming or entering a joint venture can include the participants being able to enjoy pooling expertise, better options for financing and a stronger marketing reach.
However, in order to avoid difficulties later on, it is crucial to put a comprehensive joint venture agreement in place at the outset.
If you would like to find out more, take a look at our joint venture agreements FAQs below
To discuss how our Corporate & Commercial solicitors can help you, please contact us on 01689 887840 or fill in our enquiry form.
Our solicitors can assist with…
- Advice on the right legal structure to reflect a joint venture arrangement
- Drafting the joint venture agreement
- Advice on intellectual property rights
- Advice on terminating a joint venture
- Joint venture dispute resolution
Our joint venture agreement expertise
Our Corporate & Commercial Law team have a high level of expertise in dealing with joint ventures, ensuring you have the right structure for your needs and advice on all related issues. We are based in Orpington and work with clients in London, Kent across the South East, and beyond.
We are ranked for Corporate Law by leading legal directories Chambers & Partners and the Legal 500.
For more information, see our corporate & commercial law solicitors page.
Our solicitors’ fees
We will ensure that you have a clear estimate of the likely costs at the outset, with no hidden fees or charges. Our services offer excellent value for money and we will ensure that you have a solicitor with the right level of expertise for your requirements.
If appropriate and within the scope of the work, we are able to offer initial advice on a fixed fee basis, and otherwise our charges are calculated based on hourly rates.
How our solicitors can help
Advice on the right legal structure for your joint venture
Using up the right structure for your joint venture is crucial. This will ensure you have a solid legal foundation for all that you want to accomplish. We can discuss the options available with you and recommend the best structure for your needs. This could be:
- A partnership or limited liability partnership
- A limited company to operate the joint venture with a Shareholders' agreement
- A collaboration agreement or contract between two or more people or organisations
Drafting a joint venture agreement
The process of drafting a joint venture agreement is best started by identifying the essential terms and perhaps formalising in heads of terms. This is a roadmap, setting out issues to be covered in the agreement. Heads of terms will normally be stated to be not legally binding other than limited specified clauses.
This is your chance to ensure that you and the other parties involved are broadly in agreement over the way in which you want to take your joint venture forward before more time and energy is invested in the process.
It is important to take legal advice at this early stage to ensure the provisions you are proposing are realistic and so that you understand the implications of entering into the arrangement, and take advice from other professionals, for example in relation to finance and tax.
Once any heads of terms have been agreed and settled, we can use these to draft a joint venture agreement. If the heads of terms are comprehensive, much of the negotiation should already have been carried out.
We will ensure that the necessary provisions are included and that you have the legal certainty you need for the venture.
Advice on intellectual property rights
The scope of intellectual property rights in a joint venture is wide ranging, from branding to dealing with software that is provided to or created by the venture. We can ascertain the range of intellectual property that will be included in the venture and ensure that each aspect is dealt with appropriately in documentation.
It may be necessary to deal with one party's existing branding and, where necessary, licensing the use of this by the parties to the joint venture and regulating its use.
Where intellectual property will be created, we will ensure that the joint venture agreement includes robust provisions clearly setting out how this will be dealt with and take into account issues such as licensing, use and sale, and what sums ought to be paid, and how interests are protected.
Advice on terminating a joint venture
In preparing a joint venture agreement, we will discuss the options for eventual termination of the joint venture with you. This can be by agreement of the majority of those involved or by invoking the terms of any formal agreement to end it in another way. This could be because one party wants to leave to pursue other interests, because those involved have different visions for the venture or because the venture is at an end or no longer viable.
If you are involved in a joint venture and you would like to end it or leave the business, we can advise you of your options.
Joint venture agreement dispute resolution
A well-drafted joint venture agreement should include robust provisions to deal with dispute resolution. There are many issues that could be the cause of tension, including the direction of the business, financing and how profits are shared.
A dispute resolution clause in a joint venture agreement should address points such as which jurisdiction will deal with any legal issues, and perhaps a requirement to go through an alternative dispute resolution process, such as mediation or arbitration. We can go through the options with you and ensure that your joint venture agreement includes strong dispute resolution provisions that will give you the best possible chance of dealing promptly and effectively with any disagreements.
If you are involved in a joint venture and matters have become contentious, we can advise you of the options open to you and, where necessary, represent you in negotiations or legal action to enforce your rights.
Joint venture agreements FAQs
What is a joint venture agreement?
A joint venture agreement is made between two or more parties in order to pursue a business venture together. It can be advantageous to pool resources and expertise, as well as improving your ability to secure funding and to employ outside help where necessary.
A joint venture agreement can be made between individuals or other legal entities such as companies or limited liability partnerships.
How do I set up a joint venture?
It is crucial to have a comprehensive joint venture agreement in place, specifically tailored to your particular circumstances. There are various aspects to consider in putting together a joint venture, including:
- How to structure the joint venture
- How decisions will be made
- What powers the parties will have, for example, to veto certain business or to appoint directors and managers
- Finance for the joint venture
- Intellectual property rights
- Tax implications (separate advice should be taken)
- Profit sharing and liability for debts
- Confidentiality
- How long the joint venture will run for
- Whether and how the parties can sell their interest
- A buy-out mechanism
- How the joint venture agreement can be terminated
- Exit provisions
- How disputes will be managed
If you ask us to represent you, we will go through your plans with you and identify the key clauses to give you the legal certainty you need as well as enough flexibility to be able to operate successfully.
Is a joint venture agreement legally binding?
While a joint venture can be dealt with informally, you are strongly recommended to put a legally binding agreement in place. This will give all parties a clear understanding of what is expected of them and what rights and obligations they have. This will substantially reduce the risk of a disagreement arising that could harm the business.
A formal joint venture agreement is legally binding. This is generally one of the following:
- A limited liability company shareholders’ agreement
- A limited liability partnership agreement
- A partnership agreement
- Another form of joint venture contract
We can set up the required structure on your behalf, including (in the case of a limited company or limited liability partnership) registering it with Companies House as appropriate.
Who owns property in a joint venture?
You can decide in advance who will own what in the joint venture. This does not have to be 50:50 and can be adjusted to take into account the contribution each party is making.
If you will be creating an asset in the joint venture, such as intellectual property, you will need to decide in advance how this will be dealt with and to whom it will belong or how it will be shared. You will also need to consider what will happen to assets when the joint venture comes to an end.
Do joint venture agreements need to be registered?
You will need to register your joint venture in the appropriate way, depending on its structure. For example, a company or limited liability partnership will be registered at Companies House.
If you have not set up a company or partnership, you may still need to register your joint venture with HM Revenue & Customs if the business exceeds the VAT registration threshold. Tax advice should be taken in connection with this.
We can advise you on registration issues and deal with this on your behalf where necessary.
Speak to our solicitors in Orpington, Kent
If you are considering entering into a joint venture, please feel free to call our solicitors. We have experience across a wide range of dealing with this type of agreement and we will ensure that you have a suitable agreement in place, taking into account your requirements.
To discuss how our solicitors can help you, please contact us on 01689 887840 or fill in our enquiry form.