Partnerships and Joint Ventures

A joint project may be organized through a separate company, on a contractual basis or through a combination of mechanisms; for projects with a Chinese party, the specific features are described on the page on joint ventures with Chinese partners.

When structuring a partnership, account is taken not only of the distribution of interests but also of how the parties will manage the business, finance it, distribute the results and act if the original arrangements change.

• Roles and involvementThe intended role of each partner in developing the business, their involvement in day-to-day operations and the matters for which they are responsible.
• Project boundariesThe activities that belong to the joint project, the areas that each participant pursues independently, and the demarcation of their commercial interests.
• Participants' resourcesFunds, property, technology, intellectual property, the team and other resources of each party, and the terms on which they are used in the joint project.
• Management and controlThe procedure for forming management bodies, appointing key executives, taking decisions and allocating control between the partners.
• Capital and financingThe principles of initial and additional financing, the parties' participation in providing new funds and the consequences of changes in that participation.
• Economic returnDistribution of profits, other payments and reinvestment in line with the economic model of the business and the partners' arrangements.
• Disposal of interestsTransfers of interests or shares, the admission of new participants, changes of control and the rights of the other partners when the ownership changes.
• Disagreements and exitA significant divergence of positions, inability to take a decision, one partner ceasing to participate or the termination of the joint business.
• Protecting the joint businessConfidentiality and use of information, competing activities, relationships with employees and customers, and other circumstances capable of affecting the value of the business.
• SuccessionFor partners who are individuals, events capable of affecting the composition of the owners and the management of the business: family circumstances, inheritance, a prolonged cessation of active involvement.

1. Partners' objectivesThe parties' objectives, their participation horizon and each partner's resources are reviewed.
2. ModelThe form is chosen: a joint company, a contractual model or a combination of the two.
3. Management and economicsThe decision-making procedure, financing and distribution of the economic return are determined.
4. Disagreements and exitDeadlocks, a partner's exit and the termination of the joint activity are worked through.
5. DocumentsThe charter, the partners' agreement (a corporate agreement, a cooperation agreement or a partnership agreement) and related agreements are prepared and agreed with the partners.
6. ConsentsResolutions of the management bodies are adopted and consents of third parties and regulators are obtained, where required.
7. LaunchThe documents are signed, and the company is established or the partner's entry into the existing company is completed.

• Partnership modelAn allocation of roles, resources, control and economic participation that serves the objectives of the joint project.
• Constituent documents and agreementsInterlinked drafts of documents on joint activity, financing, management and the disposal of interests.
• Rules for disagreements and exitRules set out in the documents for deadlocks, changes in the participants and termination of the project.
• Approval packagePrepared resolutions and documents for obtaining the necessary consents.
• Launch documentsSigned documents and materials obtained on the establishment of the company or on other completed procedures for launching the partnership.

The outcome of the service is the work performed within the scope agreed with the client.