Joint venture agreement solicitor

A joint venture is a formal arrangement between two or more parties that supports a specific commercial goal - whether launching a new product, entering a different market, or combining resources to deliver a common outcome.

The corporate team at JMW supports a wide range of businesses with joint venture arrangements. We work with individual entrepreneurs, start-ups, and large organisations across different sectors to draft the necessary legal documents and determine how the business venture will operate. Depending on the proposed joint venture's structure, we can deliver shareholders’ agreements and other key documents that will set out each party’s role, contributions and expectations.

Whatever your reason for setting up a formal arrangement, our joint venture lawyers will take the time to understand what matters to you and provide clear, practical advice to help you to achieve your strategic objectives. Whether your project requires a formal, incorporated joint venture or just a single legally binding agreement, we can deliver the protections you need on funding and capital contributions, intellectual property, exit strategies and day-to-day operations.

If you are entering into a contractual joint venture or need to formalise an existing one, speak to the corporate team at JMW. Call us on 0345 872 6666 or complete our online enquiry form to request a call back at a time that suits you.

How JMW can help

Our joint venture solicitors provide tailored advice on drafting joint venture agreements, for clients who are forming a new company or building on an existing business. With practical, hands-on experience in the business world, JMW's corporate experts offer advice and produce formal written contracts covering all of the following joint venture requirements:

• Corporate and partnership joint venture legal structures
• Articles of association and other governance documents that reflect the agreement between the parties.
• Shareholders’ agreements that set out rights, obligations and decision-making processes.
• Contractual or cooperation agreements that define how the commercial arrangement will operate day to day.
• Due diligence to identify any risks involved before commitments are made.
• Advising on contributions, financing options and repayment terms.
• Protections to safeguard the interests of minority participants.
• Service-level agreements.
• Dispute resolution mechanisms and resolving disputes effectively.
• Advice on exits, planning for the future and addressing what happens when the arrangement comes to an end.
• TUPE and employment law issues, if staff are affected.
• Protecting intellectual property linked to the venture, managing ownership and clarifying overall intellectual property rights.

The Legal 500 has praised our corporate and commercial team for its combination of “tactical ability” with an “agile and extremely swift” approach when advising on local, national and international transactions. We deliver practical solutions, advise on tax considerations and can support you in preventing future disputes through strong and clear contractual arrangements.

With many years of practical experience, a track record of success and the resources to handle even the most complicated arrangements, we can deliver legally binding agreements, support compliance with regulatory requirements and enable your joint venture to thrive.

Meet the team

JMW's corporate solicitors have a wealth of experience in advising on the most appropriate structure for a joint venture and producing the necessary agreements to support the organisation's commercial objectives.

What are the different joint venture structures?

Joint ventures can be established in a number of ways, and the right structure will depend on the objectives of the parties involved.

Limited company

The parties establish a new private limited company and each takes shares in it. The joint venture company operates as a separate legal entity, and will enter into contracts, own assets, employ staff and assume liabilities in its own name.

This is often the preferred structure for a substantial or long-term venture because it creates a clear division between the joint venture and the parties’ existing businesses. Liability is generally limited to the amount invested or guaranteed, although a shareholder may assume further exposure through loans, indemnities or guarantees.

The main disadvantages are the additional administrative requirements, including Companies House filings, annual accounts and Corporation Tax implications, which are not relevant under other structures.

Contractual joint venture

Under a contractual joint venture, the parties remain independent and set out how they will collaborate in a joint venture agreement, without creating a separate company or partnership. This structure may be suitable for a defined project, such as a construction contract, research initiative or joint tender, as it is generally quicker and more cost-effective to establish than a new company.

However, because the joint venture itself will not be a separate legal entity, contracts must be entered into by one or more of the participants, and the underlying agreement must allocate responsibility carefully.

There is also a risk that an arrangement described as a contractual joint venture could legally amount to a partnership, unless it is created with careful oversight by an experienced corporate solicitor.

Partnership

The parties may operate the joint venture as an ordinary partnership, which can be relatively flexible and does not have to be incorporated at Companies House. Profits are allocated between the partners, who are normally taxed individually on their respective shares. Partners also have personal responsibility for the partnership’s debts and obligations under this structure, in most cases.

Without a suitable agreement, statutory default rules may apply, which can lead to unsuitable commercial terms for the parties involved. As such, a joint venture agreement is particularly important to this type of structure.

Limited liability partnership

A limited liability partnership, or LLP, combines aspects of a company and a partnership. It is a separate corporate body, but its members usually pay tax on their respective shares of the profits in a similar way to partners.

An LLP must have at least two members, and a member can be either an individual or a company. Members are not ordinarily personally liable for debts that the LLP cannot pay, although exceptions can apply and members may separately provide guarantees.

This type of partnership is subject to Companies House registration, accounts and confirmation-statement requirements. The members should also enter into an LLP agreement setting out their respective rights and responsibilities.

Limited partnership

A limited partnership consists of at least one general partner and one limited partner. The general partner manages the business and has unlimited liability for its debts, while limited partners normally restrict their liability to their agreed contribution, in exchange for equivalent limits on their participation in management.

This structure is commonly associated with investment funds and certain property or private-equity arrangements rather than operational joint ventures. Its suitability will depend heavily on how the parties intend to manage the venture.

JMW's experienced corporate team can discuss your requirements, highlight any potential tax issues, advise on compliance with HMRC filing requirements and offer guidance on the most suitable structure for your specific project or wider commercial objective.

Does a joint venture need an agreement?

A joint venture does not always require a written agreement to exist. However, having a solicitor prepare a written document that demonstrates compliance with UK company law and clarifies the structure and requirements of the joint venture unambiguously is strongly recommended.

When prepared correctly, joint venture agreements typically act as clear, written documents that set out how the arrangement will operate and what each party has agreed to contribute, which can reduce the risk of disputes later on. Without it, the parties may face uncertainty about their rights and obligations, and this can make it harder to resolve disagreements if they arise.

With the support of JMW’s corporate team, you can put in place an agreement that is carefully structured to safeguard your investment and provide a strong foundation for the venture.

Q

What are the requirements for joint venture agreements?

A

A joint venture agreement must set out the purpose of the arrangement and the scope of the project or goal it is intended to achieve. It should define:

• What each party will contribute, whether that is financial contributions, assets or expertise
• How responsibilities will be shared and decisions made
• How the joint venture will be managed
• The duration of the arrangement
• How profits and losses will be allocated
• The steps to be taken if one party wishes to withdraw or the venture comes to an end

Q

What are the steps to a successful joint venture?

A

Establishing a joint venture involves a series of steps designed to create a clear and effective working relationship:

• Define objectives: agree on the purpose of the joint venture and what each party is aiming to achieve, whether growth, access to new markets or sharing expertise.
• Identify partners: select partners with the right skills, resources and outlook to support the success of the venture.
• Structure the joint venture: decide on the most appropriate legal and commercial framework, such as a company limited by shares, contractual venture or LLP.
• Draft a comprehensive agreement: record the rights, responsibilities and expectations of each party, setting a clear framework that helps to avoid disputes.
• Implementation: put the structure and agreements into practice, establish management processes and begin operating the venture in line with the agreed goals.

JMW’s corporate team advises businesses at every stage of this process. We help clients establish joint ventures, select the right structure and draft comprehensive agreements that reflect their objectives.

Q

Who can enter a joint venture arrangement?

A

A joint venture can be formed between two or more businesses or individuals. There is no maximum number of participants, but as the number of parties increases, the arrangement often becomes more complex.

With more stakeholders, there is greater scope for disagreements over decision-making, management and profit-sharing, which can increase the risk of disputes if the venture is not carefully structured and documented.