Joint venture literally means “a joint initiative”. In a legal sense it means two or more companies that conduct business as one.
When is a company a joint venture?
The joint initiative can, for example, happen in a separate company (a limited liability company), in a cooperative, a partnership or a limited partnership. It is also possible that a partnership is a joint venture without clear agreements to that effect having been made but merely by the fact that two people started a business together. Even then, the rules for joint venture apply.
Formation of a joint venture
If you are contemplating starting a business with others, in whatever form, it is practical to not only think about the business itself, but also about the legal form of the joint venture and about the agreements you want to make with your partners. It is important to inform yourself of the pros and cons of the different legal forms and it is also essential to ensure that agreements that have been made are properly written down in the unforeseen event that the partnership has to be terminated at some point in time.
Termination of a joint venture
Unfortunately, the termination of a partnership within a joint venture is often accompanied by quarrels, or at least a dispute. Which partner(s) can continue running the company? What is the value of the company? Should anyone be bought out? What about the financial statements? To whom can the goodwill be attributed? GMW advocaten can assist you with the demerger of a joint venture, or, if necessary, represent you in proceedings.
Do you have questions about a joint venture or do you want to discuss a case? Please contact the Company and Insolvency section.