Joint Ventures

A joint venture is where two or more companies decide that they want to work together on a particular project. 

The venture is solely in relation to the specific project, and once the project is completed the companies are likely to go their separate ways.  Joint venture arrangements are often used in relation to the development of a product or of land.

A joint venture can be structured by the incorporation of a new Company for the Joint Venture, where the companies looking to work together are the shareholders in the new company.  The new company will be incorporated for the sole purpose of working on the joint venture, and will enable all companies to share in the profits of the joint venture.  If the joint venture is for a specific short term project then the company can be wound up when the project is completed.

The advantage of setting up a separate new company is that it keeps the project completely separate from the other business of the two or more companies.

What are the most common ways to structure an international joint venture involving your jurisdiction?

England – Alex Canham (AC) In the UK, one of the main questions I ask when looking at international joint ventures (JVs) is what is the purpose? Is it a management JV designed to share information, or an output JV designed to deliver a product or service based on skill sets the parties want to bring together? That will dictate the type and structure of JV that the parties end up using.

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