What is a joint venture (JV)?
A joint venture is a formal business arrangement in which two or more parties combine their resources to pursue a specific project or commercial activity. Participants share in the control, risks, and rewards associated with the venture.
How do I structure a joint venture or shareholder arrangement using a BVI company?
This is typically accomplished through a comprehensive Shareholders’ Agreement, supplemented by tailored Articles of Association. Engaging legal counsel is strongly recommended to ensure the enforceability and effectiveness of the arrangement.
Is a joint venture the same as a partnership?
Not exactly. While a joint venture may utilize a partnership structure, it can also be organized as a corporation or operate based solely on a contract. Unlike partnerships, which typically govern ongoing business operations, joint ventures are generally limited to specific projects or defined timeframes.
What are the key benefits of a Joint Venture
Joint ventures allow parties to share expertise and resources, access new markets, reduce risk, and combine strengths for specific projects.
What are the main types of joint ventures?
Equity Joint Venture: Involves the formation of a distinct legal entity—typically a company or partnership—in which participants hold shares or interests.
Contractual Joint Venture: Created exclusively through contractual arrangements, without the establishment of a new legal entity.
Public-Private Joint Venture: A collaboration between government bodies and private sector participants to achieve mutual objectives.
Do I need legal advice to set up a joint venture?
Yes, it is strongly recommended to seek legal and financial advice to ensure the structure and agreements are compliant, enforceable, and aligned with the parties’ interests.
Do joint ventures require a new legal entity?
Not necessarily. Joint ventures may be established by incorporating a separate legal entity, such as a corporation, limited liability company, or partnership. Alternatively, they can be formed through contractual agreements without creating a new entity.
How can a joint venture be structured?
A joint venture can be formalized through a shareholders’ agreement, customized articles of association (if a new entity is formed), or a contractual agreement outlining the rights, responsibilities, and contributions of each party.
