Embarking on a joint venture can throw up a number of complex legal issues, with partners collaborating across many areas of business as part of a single project. While such projects allow for the distribution of risk and sharing of expertise, accessing expert legal advice is essential to ensuring that your project runs smoothly. By instructing a solicitor from the Property Development Team at Wilford Smith at the earliest possible stage, you can be assured that you are receiving the highest quality advice to support you in meeting your commercial objectives.
What is a joint venture?
A joint venture is an agreement whereby two or more parties, either individuals or companies, work together on a specific business project. Joint ventures are seen as a flexible type of business agreement, with partners taking responsibility for different parts of a project in line with their particular area of expertise. Joint venture agreements will often be arranged to reflect the respective parties' strengths, areas of responsibility and profit share, and will often be short-term in nature, covering the completion of a specific project.
What are the different types of joint venture?
A number of different types of joint ventures exist. Parties will choose the arrangement that best suits the objectives of their project.
Partners may agree to work together in a limited and specific way, for example when a small company wishes to sell through a larger company’s distribution network. A joint venture could be entered into for this purpose, with the terms and conditions of the agreement reflecting how this would work and for how long.
Another option is where parties set up a separate joint venture business in order to handle a particular project. Partners in the joint venture will draft an agreement on how this will be managed. In some cases, parties will form a business partnership, a limited liability partnership, or will merge two businesses in order to undertake a project.
In many cases, parties will enter into a corporate joint venture. This will result in the formation of a new company, with each partner being allocated shares. In the case of such agreements, it is vital to seek expert legal advice. By doing so, you will ensure that all parties to the agreement will have a clear understanding of the aims and purposes of the project, as well as their individual obligations and liabilities.
What are the benefits of a joint venture?
A joint venture can allow businesses to strengthen long-term relationships or to effectively collaborate on a short-term project, to grow more quickly and generate greater profits. Embarking on a joint venture offers businesses access to new markets, increased capacity, the sharing of risks and costs, and access to resources, expertise and technology held by other individuals and businesses. Partners in a joint venture can also work together for the benefit of research and development.
What are the risks of a joint venture?
Reaching consensus regarding the terms of a joint venture is essential in reducing the risks associated with such an undertaking. Partners must be clear on the objectives of their venture, and these must be communicated to all parties. Failure to reach agreement at the earliest stage can result in poor integration and cooperation, especially in instances where there are different levels of investment, expertise and assets brought to the venture by different partners. Strong management and leadership are also required to ensure that a joint venture is successful.
Contact our Property Development Specialists in Sheffield
The Property Development Team at Wilford Smith provides our clients with a high-level service tailored to their business, covering all areas of property development. We will ensure thorough analysis of documentation in support of your joint venture, and are always on hand to answer any queries you may have at any stage. Our solicitors will provide you with clear and practical legal advice, working with you to regulate your business relationships and to make sure that all parties to a joint venture have a clear understanding of how they will work together.
Our Property Development Solicitors are based in Sheffield and serve clients throughout England and Wales. Contact us today on 01709 828 044 to find out how we can help.