Joint Venture Agreement Solicitors
A joint venture agreement is a contract between two or more businesses that agree to collaborate on a specific project or business, setting out each party’s contributions, how decisions are made, how profits and losses are shared and how the venture ends.
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Adam Bernard Solicitors advises businesses in London and across the UK on structuring, negotiating and documenting joint ventures.
Joint ventures let businesses combine resources, expertise or market access without a full merger. They also create risk: partners may disagree on strategy, fail to contribute, or compete with the venture. A well-drafted joint venture agreement anticipates these problems.
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Choosing a Joint Venture Structure
There are three main joint venture structures in the UK: a contractual joint venture, a joint venture company and a partnership or limited liability partnership.
- Contractual joint venture – the parties collaborate under a contract without creating a new Suitable for short-term or project-specific collaborations.
- Jointventure company – the parties own shares in a new limited company governed by the Companies Act 2006. Combined with a shareholders’ agreement and articles. Offers limited liability and a clear structure for longer ventures.
- Partnership or LLP – a general partnership under the Partnership Act 1890, or an LLP under the Limited Liability Partnerships Act 2000. Note that general partners can be jointly liable for partnership debts.
The right structure depends on tax, liability, the length of the venture and how profits will be extracted.
Key Clauses in a Joint Venture Agreement
The essential terms of a joint venture agreement cover purpose, contributions, governance, finance, intellectual property, restrictions, deadlock and exit.
- Scopeand purpose – what the venture will and will not
- Contributions – cash, assets, staff, intellectual property or know-how from each party, and when they are due.
- Governance– board composition, voting and matters requiring unanimous
- Funding– how further funding is provided and the consequences of failing to
- Profitand loss sharing – distribution policy and
- Intellectualproperty – ownership of background IP and new IP created by the
- Confidentiality and non-compete – restrictions on competing with the venture. Supported by non-disclosure agreementsduring negotiations.
- Deadlockresolution – escalation, mediation and buy-sell
- Exit and termination – transfer restrictions, pre-emption rights, put and call options and what happens to assets on termination.
Competition Law and Joint Ventures
Joint ventures between competitors must comply with competition law, and some arrangements may need to be notified to regulators. Agreements that restrict competition can infringe the Chapter I prohibition in the Competition Act 1998. Larger joint ventures can also qualify as mergers reviewable by the Competition and Markets Authority. We assess these issues at the outset.
National Security Screening
Some joint ventures involving sensitive sectors require mandatory notification to the government under the National Security and Investment Act 2021. Seventeen sensitive sectors, including defence, energy, data infrastructure and artificial intelligence, are covered. See GOV.UK guidance on which acquisitions must be notified.
Due Diligence Before a Joint Venture
Before signing, each party should check the other’s financial standing, ownership, key contracts, intellectual property and regulatory position. You can check company filings and officers on the Companies House service.
Joint Venture vs Shareholder Agreement
A joint venture company usually needs both a joint venture agreement (or a joint venture-specific shareholders’ agreement) and tailored articles. For companies with multiple founders or investors, rather than a collaboration between businesses, see our shareholder agreements page.
Joint Venture Checklist Before Signing
Before committing to a joint venture, each party should be able to answer these questions.
- Whatexactly is the venture’s purpose, and what is outside it?
- Whatwill each party contribute, and when?
- Whocontrols day-to day management and which decisions need unanimous consent?
- Howwill further funding be raised, and what happens if a party cannot fund?
- Whoowns the intellectual property created by the venture?
- Howcan a party exit, and how will its interest be valued?
- Whathappens if the venture fails?
If any answer is unclear, the agreement is not ready to sign.
How Adam Bernard Solicitors Can Help
We advise on structure, draft joint venture agreements and heads of terms, review proposals through our contract review service, and prepare related directors’ service agreements. See all our commercial contract services.
Call 0207 100 2525 (24/7) or book a free consultation to discuss your contract.
This page is for information only and does not constitute legal advice.
Frequently Asked Questions
What is a joint venture agreement?
Does a joint venture need a new company?
What happens if joint venture partners reach deadlock?
Can a joint venture between competitors breach competition law?
Should we sign heads of terms before a joint venture agreement?
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