Establishing a JV in Great Britain is a rather cumbersome process; however, once completed, it provides all its participants with a number of tangible benefits. Of course, there’s disadvantages too (e.g. having to settle financial disputes in Great Britain); however, benefits outweigh them by a wide margin.
Taking full advantage of JVs’ potential requires having a good understanding of their underlying concept. It should also be borne in mind that the best time to discuss & agree on the key aspects of a future joint undertaking is prior to the establishing of a joint venture in Great Britain.
Here’s what potential partners have to keep in mind:
JVs can be established as companies or other corporate structures (e.g. LLPs); however, it is also possible for future partners to enter into direct contractual relations. Prior to registering a JV in Great Britain, they should also agree on the type of activity they’re planning to be engaged in.
If a JV is established as a company, partners should reach a deal on how many shares will be owned by each of them and what rights a share will entitle them to (taking part in voting, receiving dividends, appointing a director, etc.). There can be compromises which include giving minority stakeholders a preemptive right before any transfer takes place.
Partners should agree on their roles & responsibilities. If they intend to register a JV in Great Britain, they should agree on the procedure for holding meetings of directors & other organizational matters.
Partners should agree beforehand on a list of key actions (e.g. changing a company's AoA or taking vital business decisions) that can only be taken after getting their express consent.
Before proceeding with any further actions, partners should agree on & sign an agreement on the setting up of a JV in Great Britain. A document like this regulates a future business development plan & provides each partner with a feeling of certainty.
To sum up, opening a JV in Great Britain has a number of advantages to it. However, doing so requires having an in-depth knowledge of the local legislation. If you can’t afford to spend a lot of time & money on becoming an expert in British laws on joint ventures, your best bet would be to contact IQ Decision UK. Our legal advisors will be happy to give you a hand with any legal issues you’re facing in this regard.