Joint Ventures

Joint ventures as corporate alliances are growing rapidly, as businesses are increasingly collaborating with other companies – pooling their resources and expertise to develop new service or products, expand into different markets or increase operational capabilities.

joint venture

They can offer substantial opportunities in terms of access to new markets, the sharing of risk and can deliver economies of scale, but they are complicated transactions, and can lead to a loss in shareholder value if not structured and implemented appropriately.

Del Canto Chambers offers strategic legal and tax advice on joint ventures, strategic alliances, agency and representation agreements, helping parties to achieve their commercial objectives. The delivery of quality joint venture advice requires a clear understanding of the parties’ commercial objectives and specialist advice across a number of disciplines: intellectual property, tax and competition to name but a few. Our joint venture lawyers have significant experience of delivering structures, including cross border arrangements, designed to ensure that the commercial objectives of the joint venture partners are achieved and their commercial interests are properly protected.


Types of Joint Venture

Our team has broad expertise in a wide range of joint venture models and can advise on the commercial and strategic issues involved. Joint ventures cover a wide range of collaborative business arrangements which involve differing degrees of integration and which may be for a fixed or indefinite duration. We advise on all forms of joint ventures, both domestic and cross border, including the following:

  • Joint ventures
  • Strategic Alliances
  • Partnerships
  • Shareholder agreements
  • Agency agreements

Every joint venture deal must be carefully planned, managed and customised for all parties’ specific businesses and needs. As such, we have created an operating agreement model that addresses our clients’ needs. Our services include supporting investors and entrepreneurs, advising on structuring as well as drafting and negotiating joint venture agreements, from the initial NDAs and MoUs down to execution.

We also provide counsel on regional regulatory matters; thanks to our international presence (in Spain, the UK and Qatar) we can guide overseas professional services firms that are in the process of establishing offices in the UK and continental Europe and advise on cross-border mergers.


Why form a Joint Venture?

A joint venture allows businesses to grow and gain access to markets or expertise beyond their existing capability. They offer lots of advantages including:

  • New product or service development – Pooling of resources, expertise and skills to develop, market and deliver products and services.
  • Expanding into new markets – Breaking into new jurisdiction or sector can be facilitated through a partner who has an existing route to market.
  • Bundling products and services – to create a value-added single offering that better suits the needs of customers and is more competitive.
  • Partner endorsement – gain credibility through recommendation in return for revenue and referrals
  • Shared marketing – Pooling of marketing budgets to create greater reach and more effective marketing channels.

Joint Venture Legal Structure

Joint Ventures can be described as a business arrangement, where two or more independent firms come together to form a legally independent undertaking, for a stipulated period, to fulfil a specific purpose such as accomplishing a task, activity or project. In other words, it is a temporary partnership, established for a definite purpose, which may or may not use a specific firm name.

Joint ventures can take whatever form of agreement is best suited to the circumstances – though a clear legal agreement should be put in place prior to any joint venture being created. Effectively a Joint Venture is a commercial agreement where each company maintains their separate business structure and legal status, with joint ventures creating a new, jointly-owned child entity that is effectively at arm’s reach from the parent companies.

With so many organisational structures it is important to consult with experienced legal and tax specialists from the outset, choosing the appropriate structure for your business venture affects many aspects down the road such as legal protections and levels of taxation. It is also not a simple matter to change structures later.

Managing a joint venture is usually a complicated and complex task, especially if collaboration is required with counterparts in foreign jurisdictions. Careful legal and tax planning is required at all development stages.


Joint Venture Legal Structure

  • Agreement: Two or more firms come to an agreement, to undertake a business, for a definite purpose and are bound by it.
  • Joint Control: There is an element of joint control over business assets, operations and administration.
  • Pooling of resources: Parties pool their resources and expertise like capital, manpower and technical innovation.
  • Sharing of profit and loss: The co-venturers agree to share the profits and losses of the business in an agreed ratio.
  • Economies of scale: By entering into a joint venture the firms get access to a a wider number of resources and opportunities whilst also decreasing overall cost and also improves quality.
  • Dissolution: Once the term or purpose of the joint venture is complete, the agreement comes to an end, and the accounts of the coventurers are settled, as and when it is dissolved.

Joint Venture Legal Structure

We have worked on many joint ventures. Here are some examples:

  • AS, the largest sports newspaper in the Spanish-speaking world: Setting up AS in Arabic. Representing AS in a joint venture between Grupo PRISA and the Qatari media group, Dar Al Sharq.
  • Huffington Post: Advising on all legal and tax implications of a joint venture between Integral Media group and Arianna Huffington at Huffington Post to publish Huffpost Arabi.
  • Observatorio de Habla Hispana: Conducting the negotiations between the London School of Economics and El País to create Observatorio de Habla Hispana in London.

Furthermore, we assist with reorganising or dissolving a joint venture or partnership if required. Our lawyers recognize the need to plan the parties’ exit from any joint venture and treat this process as carefully as its formation.


Agency and Representation

Besides setting up a company, acquiring one or setting up a joint venture or partnership, you can opt for drafting an agency and representation agreement. Setting up an agency involves drafting an agreement between an individual and legal entity (the agent) in exchange for remuneration, to promote commercial acts or transactions for the account of another.

In this way, agents are independent intermediaries who do not act in their own name, but rather on behalf of someone else. It can be a good option for promoting your business, bringing in new leads and clients, as typically, the main task of an agent is to bring together all parties involved in a transaction.


How can we help

Del Canto Chambers team uniquely understands the international tax and legal complexities, ensuring that details, no matter how small, are not overlooked in a joint venture. Our team has broad expertise in a wide range of joint venture models and can advise on the commercial and strategic issues involved. Our firm can help you navigate through the drafting of the agreement in order to negotiate and agree on the most convenient clauses for your business.

Some joint ventures continue as long-term relationships, but in many cases they have defined timeframes and our team can ensure a legal agreement is in place to ensure a smooth and transparent exit strategy is in place.

We have worked with a variety of projects in Spain, Middle East and Latin America, advising European and American companies. As members of The Leading Edge Alliance, we work with local auditing firms throughout the world who can assist with tax audits and general compliance

Get in touch and tell us about your requirements

Our number one priority is our clients’ individual needs. We will collaborate with you to meet your goals and build a customised structure for the venture while meeting each parties’ specific needs. Joint ventures are all about the allocation of risk and responsibility. We work with you to anticipate potential areas of commercial conflict and develop practical and appropriate mechanisms to resolve disputes. Contact us to find out how we can help.

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