Joint Ventures and Shareholder Agreements
Joint Ventures
We are regularly instructed by clients who enter into joint ventures with other entities whether on a majority, minority or an equal basis. We have recently acted for a client in a joint venture project for the development of a European hotel complex.
There are many reasons why a joint venture may be an appropriate solution. For example, it allows the parties to spread the risks and costs associated with the project and may result in an improved access to various financial resources. It can also provide access and a transfer of skills, technology and innovative managerial practices between the parties to the joint venture. Often, joint ventures can also result in the creation of a stronger competitive unit.
Shareholder Agreements
We also advise owners of companies in regulating the relationships between shareholders and management with particular emphasis on providing appropriate exit mechanisms when relationships break down.
We have recently advised and prepared a shareholders' agreement for a physiotherapy practice. They appreciated the importance of having in place a mechanism to deal with how important business decisions would be made, provisions governing how shares can be transferred and how any disagreements or disputes will be dealt with.
In addition, a shareholders' agreement, together with agreements such as a cross option agreement, or put and call agreement, can circumvent unsavoury situations. For example, where an offer is received for purchase of shares in a company and a minority shareholder becomes difficult attempting to spoil the deal. Conversely, the appropriate agreements can also protect minority shareholders, ensuring that in a similar situation they are offered no less favourable terms than the majority shareholder(s).
A shareholders' agreement also has the benefit of being a private document, whereas other constitutional documents governing the company will be available for public inspection.
If you would like further advice on joint ventures or shareholders' agreements, please contact a member of our team
