What is a Joint Venture?
While there are different types of Joint Venture (limited by guarantee, partners holding shares, etc.), in its simplest form, a Joint Venture is a business agreement whereby two or more individuals or business agree to control an enterprise and share profit and loss without a full merger.
The key ingredient of a Joint Venture, whether it is a commercial Joint Venture, a property Joint Venture or in the renewable industry, is trust and a good working relationship. No legal documentation, however well drafted can provide that for you.
However, robust Joint Venture documentation is vital to lay down full commercial terms in order to avoid later disputes. Joint ventures can take the form of:
- Contractual Joint Ventures;
- Limited Partnerships;
- Limited Liability Partnerships;
- Co-operation Agreements; and
- Collaboration Agreements.
Joint Venture Contracts
Joint Venture contracts put measures in place regarding a myriad of issues that can arise in relation to such agreements. For example, mixing business entities within a Joint Venture may give rise to different tax rates applying. Without careful consideration at the outset and negotiation, this could give rise to a significant difference of opinion at a later date.
Turcan Connell's business law team has significant experience in relation to Joint Venture agreements, particularly property led Joint Ventures and Joint Ventures/LLPs in the renewable industry. We work closely with our tax colleagues on the architecture of Joint Ventures, ensuring that all commercial tax issues are outlined in advance.