Entering into a joint venture
You may be considering collaborating with another business on a single project or on an ongoing basis. This is often referred to as entering into a “joint venture”. If so, you will need to consider:
- What the responsibilities of each party are;
- How any income from the project (or projects) will be distributed between the parties; and
- Who is liable and to what extent if there are problems with the project?
It is important to ensure that businesses involved in a joint venture adopt the correct structure to oversee the arrangement. The appropriate structure may be determined in part by the size and nature of the project and by any tax implications in respect of the transaction. Common joint ventures include:
- Contractual relationships between parties where the parties retain their separate legal identities and the terms of the project are clearly set out in the contract.
- The setting up of a separate legal entity, usually a private limited company or “joint venture company” through which the parties undertake the project.
- Where the parties are individuals, they may choose to set up a limited liability partnership to ensure that the terms of the joint venture are clear but that they are protected in the event that problems arise in respect of the project.
- Individuals may also enter into partnerships either intentionally or unwittingly where they work together with a view to making a profit.
Whatever the nature of your business and the project, we are experienced in guiding you throughout the process of a joint venture, from advising you on the best structure for the joint venture, through negotiation the deal, to drafting the relevant documentation. We can also put you in touch with other professionals such as accountants to ensure that the deal is tax efficient.
If you are considering undertaking a project with another business or individual and want to discuss the legal implications do give us a call on 020 7611 4848 or email us at firstname.lastname@example.org.