Joint Venture

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A joint venture is when two or more businesses join forces to work together, either on a single project or on a long-term basis for a continuing purpose.

There are numerous benefits of belonging to a joint venture. Participants can share costs, for example those of research and development into new and emerging fields, or high capital expenditure. Similarly, participants can spread the risk of investing by each contributing lesser amounts. They can also share existing resources such as plant, machinery and office space.

Bringing the talent and skillsets of employees of more than one company together, can generate different and innovative ideas and allow participants to benefit from knowledge and expertise they might not otherwise have had ready access to. Each business will bring with its own learned experience which may prove invaluable.

Both participants will also gain the advantage of tapping into the other’s customer base and geographical market. This can be particularly exciting for participants operating cross-border who may want to expand their distributions networks further afield. For participants wanting to diversify they may also access a different product market altogether.

Of course, the joint venture as a whole is bigger than its component parts, enabling participants to benefit from economies of scale and greater bargaining power when buying or selling. They may be able to share other associated costs for example advertising and marketing or using third party labour.

Problems can arise though if a joint venture isn’t properly set up and documented from the outset, the most obvious one being within management. As there is more than one company to a joint venture, conflict can arise and horns can lock when it comes to decision-making. This can cause the joint venture to stagnate, and low morale amongst employees. This can be exacerbated too if generally speaking the cultures of the participating companies are at odds with each other, or otherwise dissimilar. Concerns may be raised that a participant may in fact be a ‘Trojan horse’, there simply to spy on or steal business acumen from the others, enabling it to then compete with them or the joint venture as whole.

The joint venture must be careful to comply with competition law, which exists to protect not only the consumer but the market itself, maintaining high standards of output and to encourage continual product development. Consideration must also be given to an exit strategy when the time comes, enabling the joint venture to be brought to end satisfactorily.

We understand that whilst a joint venture must adhere to often complex legal, financial, operational and technical requirements, it must also promote the commercial objectives of each participant. As commercial lawyers we can help you to determine the most appropriate structure for your joint venture based on its nature and size, the participants and where they are located, and its overall purpose. We can alert you to any potential legal and regulatory issues to resolve them ahead of time, and carry out due diligence on other participants with whom you want to form the joint venture. Finally, we can ensure that all the necessary documentation is correctly drafted to reflect both your intentions as our client, and the intention of the joint venture. The joint venture agreement will be critical in setting out the rights and obligations of all parties to a joint venture. Recording this all properly from the start avoids the risk of costly and lengthy complications in the future.

Intellectual property refers to a creation of the mind. This may be an invention, artistic or literary work, symbols, words, images and other forms of creative expression.

Intellectual property is protected by law in the same way as a tangible asset or physical property. Businesses must be aware of intellectual property rights to ensure they protect themselves competitively and to avoid inadvertently infringing on the intellectual property rights of others.

Intellectual property rights typically fall into two categories, those that are registered and those that are not. Registered rights must be registered, to afford the owner legal protection and prevent others using their intellectual property without their permission. Unregistered rights needn’t be registered and arise automatically.

David Cammack

Solicitor, Commercial Department and Public Notary

“Stephen has a detailed and broad knowledge of commercial law. His practical advice enables him to develop long-term relationships as a trusted advisor to his clients” – Neil Smith, LB Group Accountants.”

Matters Related to Intellectual Property:

Depending on your circumstances you may need advice for various reasons such as:

If you would like more information on intellectual property

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