Documentation Involved
Joint venture transactions call for clear well drafted documentation. Basic legal documents for establishing a joint venture are likely to be:
• a joint venture/shareholders’ agreement; and
• the memorandum and articles of association of the joint venture company.
The purpose of a shareholders’ agreement will be to establish the basic rights and obligations of the parties and to ensure the company and its business are established and run in accordance with the participants’ objectives. A further purpose is to prescribe, as far as possible, for what will happen if difficulties occur. (For guidance on what should be contained in joint venture documents please refer to the text box at Appendix 1).
In the case of non-corporate joint venture structures, the basic objectives of any formal arrangement between the participants will be substantially similar to that of a shareholders’ agreement with essential differences reflecting where appropriate the absence of a separate legal vehicle and the fact that the joint venture may relate to a project of finite duration.
