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Joint Venturing and Partnering
Teaming up with another business can be a great way to provide new services and products to customers. Combining specialist services or products from two or more businesses can allow for innovation or a more efficient way of providing goods or services.
Types of Joint Venturing and Partnering
The first decision to be made in any joint venturing or partnering arrangement is how the arrangement is going to be structured. Our team can help you to weigh up the pros and cons of having a loose arrangement or establishing a dedicated company or operating in some other way.
A loose partnering agreement can provide parties with greater flexibility. However, it can make it more difficult for the parties to manage the relationship. This is because it is often not as clear who is contracting with customers and how the partnering arrangement ties in with their day to day business.
Whilst creating a clear joint venture entity (whether this is a separate limited company or a formal partnership) provides a focus for the parties - there is a clear contracting party and the stakeholder’s obligations to this entity are often clearer (given that there is this separate entity) - this can often be seen as more restrictive for the parties and involve them in tighter, more structured administrative processes.
Why Choose JMW?
Our team has lots of experience advising businesses entering into joint ventures or partnerships and uses this experience to ensure that each party has a clear understanding of:
- what is expected of them;
- who is responsible for providing funding;
- who bears risk in relation to trading (and in what proportions);
- how decisions affecting the venture will be made ; and
- what happens if the relationship breaks down or one party doesn’t want to be involved anymore.
One of the key areas in any joint venture arrangement is to ensure that one party is not able to railroad the other and equally that one party is not able to be obstructive, or not pull its weight, if its management decides not to focus on the joint venture anymore.
Our team is able to pull on its vast experience to provide mechanisms and good governance processes to ensure that each party is protected without leaving clunky and overbearing meetings and management by committee.