Joint Ventures and Partnerships

One size does not fit all, so its important to discuss with your solicitor the purpose and aims of the partnership so that the best business structure can be chosen.

Often company structures are likely to be beneficial due to the limited liability protection given by a company and due to the ease in creating bank accounts, third party contracts and shareholdings which are readily understood and recognised by all those third parties who you’ll be dealing with.

For example, if you want to attract investors to invest in your project, a company structure is almost certainly going to be required. Also, if you want to be able to issue shares in your new business to employees, then again a company is the obvious and sometimes only choice.

Partnership structures can be beneficial from a tax perspective, depending on the nature of the underlying business. Although, even then, a limited liability partnership (or ‘LLP’) may prove more effective and provide greater protection to the partners, rather than a simple individual partnership structure.

A joint venture may remain a valid business structure where the two parties have their own existing corporate structures and wish to remain somewhat ‘separate’ from each other. A joint venture agreement can avoid the need to create a new jointly owned company, and to deal with the ownership and control issues that will arise in such a structure.

A joint venture can also be easier to terminate or unwind, with both parties simply going their separate ways, rather than having to address what happens to the assets and potential liabilities contained within a jointly owned company.