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Practical legal advice for businesses looking to collaborate, share resources, and grow together.
Thinking about partnering with another business? A joint venture can be a smart way to access new markets, share expertise, pool resources, or tackle projects that would be too risky or expensive to go alone. But getting the structure and agreements wrong can lead to disputes, unexpected liabilities, and partnerships that fall apart.
Our joint venture solicitors help businesses across Wales and the UK set up collaborations that work. We’ll help you choose the right structure, negotiate fair terms, and put agreements in place that protect your interests while giving the venture the best chance of success.
Get a free, no-obligation chat with our commercial team, call us on 02920 829 100 or use our Contact us form.
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A joint venture is a commercial arrangement where two or more businesses agree to work together on a specific project or ongoing business activity. The parties typically share resources, costs, risks, and rewards while remaining separate legal entities.
Joint ventures come in many forms. At one end, you might have a simple contractual agreement to collaborate on a single project. At the other, you might set up a new company that both parties own and run together. The right structure depends on what you’re trying to achieve, how long the arrangement will last, and how much integration makes sense.
What makes a joint venture different from simply hiring a contractor or supplier is the element of shared endeavour. Both parties have skin in the game. Both contribute something, whether that’s money, expertise, technology, contacts, or other resources. And both share in whatever success (or failure) the venture achieves.
Joint ventures are popular because they let businesses do things they couldn’t do alone or might not want to do because it’s too risky. You might have technical expertise but lack the capital to commercialise it. Your potential partner might have the money and market access but not the know-how. Together, you can achieve something neither could separately.
If you’re considering a joint venture arrangement, let’s talk through your options.
Get a free, no-obligation chat with our commercial team, call us on 02920 829 100 or use our Contact us form.
Whether you’re setting up a new joint venture, joining an existing one, or restructuring a collaboration that isn’t working, we can help at every stage.
The structure you choose for your joint venture has significant implications for liability, tax, governance, and how easy it is to exit if things don’t work out. We’ll talk through your commercial objectives and help you decide whether a corporate joint venture, contractual arrangement, partnership, or LLP makes most sense.
We can advise on:
The joint venture agreement is the foundation of your collaboration. It sets out what each party contributes, how decisions get made, how profits and losses are shared, and what happens if things go wrong. Getting this right at the outset prevents disputes later.
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If you’re entering a joint venture with a larger or more experienced partner, you need someone in your corner who understands what’s market standard and where you should push back. We’ll help you negotiate terms that protect your position without derailing the deal.
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A joint venture typically requires more than just the main agreement. Depending on the structure and nature of the venture, you may need service agreements, IP licences, funding arrangements, property documents, and employment contracts.
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Joint ventures don’t always work out as planned. Circumstances change, relationships sour, or the venture simply runs its course. We help businesses restructure joint ventures that need to evolve and manage exits when it’s time to move on.
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There’s no single legal form for a joint venture in the UK. The right structure depends on your specific circumstances. Here are the main options:
This is the most common structure for formal, long-term joint ventures. The parties incorporate a new limited company and become its shareholders. The company operates as a separate legal entity, owns assets, employs staff, and contracts in its own name.
How it works:
The joint venture company (often called a “JVCo” or “Newco”) is set up and registered at Companies House. Each party subscribes for shares, with shareholdings typically reflecting their respective contributions or agreed profit shares. The relationship between shareholders is governed by a shareholders’ agreement, which sits alongside the company’s articles of association.
Advantages:
Disadvantages:
Best for: Long-term collaborations, ventures that need external finance, situations where limited liability is important, and arrangements where parties want a clear separate identity for the venture.
An LLP combines features of a partnership with limited liability protection. It’s a separate legal entity, but for tax purposes, it’s treated as a partnership, with members taxed directly on their share of profits. Again, we don’t advise on tax so you would need to obtain separate tax advice.
How it works:
The LLP is registered at Companies House. Members’ rights and obligations are governed by an LLP agreement (similar to a shareholders’ agreement). Unlike a company, there’s no rigid distinction between directors and shareholders. Members can be involved in management to whatever extent suits them.
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Disadvantages:
Best for: Professional services collaborations, ventures where tax transparency is important, and arrangements where parties want flexibility without the formality of a company.
A contractual joint venture is simply an agreement between the parties to collaborate. No separate legal entity is created. Each party retains its own assets and contracts in its own name.
How it works:
The parties enter into a collaboration agreement or consortium agreement setting out how they’ll work together, what each contributes, how costs and revenues are shared, and how decisions are made. Each party remains a separate business and is responsible for its own obligations.
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Disadvantages:
Best for: Short-term projects, strategic alliances, collaborations where parties want to stay loosely connected, and situations where speed and simplicity matter more than formal structure.
A traditional partnership arises whenever two or more people carry on business together with a view to profit. It can be created by agreement or can arise by conduct, even without the parties realising it.
How it works:
Partners share profits and losses according to their agreement (or equally if there’s no agreement). Each partner can bind the partnership and create liabilities for the other partners. Partners are jointly and severally liable for all partnership debts, meaning creditors can pursue any partner for the full amount.
Advantages:
Disadvantages:
Best for: Small-scale collaborations between parties who trust each other, ventures where unlimited liability is acceptable, and situations where partners want maximum flexibility with minimal formality.
Whatever structure you choose, the joint venture agreement needs to cover certain essential matters. Here are the key provisions:
What’s the joint venture for? This might seem obvious, but clearly defining the venture’s objectives, permitted activities, and any geographical or market restrictions prevents future disagreements about what the venture should be doing.
What is each party putting in? Contributions might include cash, assets, intellectual property, expertise, staff time, customer relationships, or other resources. The agreement should specify what each party contributes, how contributions are valued, and what happens if additional funding is needed.
How are ownership interests allocated, and how are profits (and losses) shared? These don’t have to be the same. You might split ownership 50/50 but agree that profits are shared differently, perhaps reflecting different levels of ongoing involvement.
How will the venture be managed? Who appoints directors or managers? What decisions require unanimous consent, and what can be decided by majority? The governance provisions need to balance efficiency (being able to make decisions quickly) with protection (ensuring neither party can be railroaded on important matters).
Certain significant decisions typically require consent from all parties (or a supermajority). These “reserved matters” might include issuing new shares, taking on debt, making major investments, changing the business, appointing key staff, or entering significant contracts. The list is negotiable but needs careful thought.
Each party will want visibility of how the venture is performing. The agreement should specify what financial and operational information each party receives, how often, and in what format.
What happens if the parties can’t agree on something important? Deadlock provisions might include escalation to senior executives, mediation, expert determination, or ultimately a right to buy out the other party or wind up the venture. Without clear deadlock mechanisms, disputes can paralyse the business.
Can a party sell or transfer its interest? To whom? On what terms? Most joint venture agreements restrict transfers and give existing parties a right of first refusal if someone wants to exit. You might also want drag-along rights (forcing minorities to sell alongside a majority) and tag-along rights (letting minorities sell alongside a majority).
How does the venture end? This might be at a fixed date, on achievement of its purpose, by agreement, or following certain trigger events. The agreement should cover how assets are distributed, how liabilities are settled, and what restrictions continue after termination (such as non-compete clauses).
If either party is contributing IP to the venture, or if the venture will create new IP, the agreement needs to address ownership, licensing, and what happens to IP when the venture ends. IP issues are a common source of joint venture disputes, so getting this right is crucial.
Joint venture partners inevitably share sensitive information. The agreement should include confidentiality provisions protecting each party’s information and restricting how it can be used.
Should parties be restricted from competing with the venture? Non-compete clauses need to be carefully drafted to be enforceable while not unduly restricting legitimate business activities.
Setting up a joint venture properly takes time and planning. Here’s what the process typically looks like:
Stage 1: Commercial Discussions
The parties discuss their objectives, what each brings to the table, and the broad outline of how the venture might work. At this stage, it’s worth involving lawyers and accountants to flag any structural, tax, or legal issues early.
Typical timeframe: 2-4 weeks
Stage 2: Heads of Terms
Once there’s agreement in principle, the parties document the key terms in heads of terms (also called a memorandum of understanding or letter of intent). This is usually non-binding but provides a roadmap for negotiating the detailed agreements. Getting professional input at this stage saves time and money later.
Typical timeframe: 1-2 weeks
Stage 3: Due Diligence
Each party investigates the other and any assets being contributed to the venture. The scope depends on the size and complexity of the deal, but might cover financial, legal, tax, operational, and commercial matters.
Typical timeframe: 2-6 weeks
Stage 4: Documentation
Lawyers draft the joint venture agreement and supporting documents. These are negotiated between the parties, often through several rounds of comments. For a corporate joint venture, this includes the shareholders’ agreement, articles of association, and any ancillary agreements.
Typical timeframe: 3-6 weeks
Stage 5: Completion
Once all documents are agreed and any conditions satisfied, the parties sign. For a corporate joint venture, this is when the new company is incorporated (or acquired), shares are issued, and any assets transferred. Directors are appointed and the venture begins operations.
Typical timeframe: 1-2 weeks
Stage 6: Post-Completion
After completion, there’s admin to handle: registering the new entity at Companies House, transferring assets, setting up bank accounts, and implementing operational arrangements. The joint venture then moves into its operational phase.
Ongoing
Joint ventures can go wrong for many reasons. Here are some of the most common issues we see:
If the parties have different ideas about what the venture is supposed to achieve, conflict is inevitable. Make sure everyone’s aligned on objectives before you start.
Relying on goodwill and handshakes is risky. Even if relationships are good now, circumstances change. Proper documentation protects everyone and provides a framework for resolving issues.
People focus on getting into joint ventures but not on getting out. What happens if it doesn’t work? If one party wants to leave? If you fall out? Planning for these scenarios upfront makes them much easier to handle.
50/50 joint ventures are common, but they create the risk of deadlock. If neither party can break a tie, decisions don’t get made. Build in clear deadlock resolution mechanisms.
Who owns the intellectual property? What the venture brings in, what it creates, and what happens when it ends? Unclear IP arrangements cause serious disputes. Nail this down at the start.
One party expects hands-on involvement; the other expects a passive investment. One wants quick growth; the other wants steady returns. Mismatched expectations create friction. Be explicit about what each party expects.
Contractual joint ventures risk accidentally creating a legal partnership, with unlimited personal liability for all partners. Proper drafting can prevent this, but it needs attention.
Choosing a law firm is a big decision. You want experts who actually get you and your organisation, respond when you need them, and give you straight answers. That’s us. We’re one of Wales’ leading commercial law firms, and we do things a little differently.
You won’t be passed through layers of gatekeepers here. When you call, you’ll speak to the solicitor handling your matter. You’ll have their mobile number, their email, and a genuine working relationship. Our clients tell us this makes all the difference when negotiations are moving quickly.
We don’t work in silos. Our corporate team works closely with colleagues in commercial, employment, property, and tax to make sure every aspect of your joint venture is covered. If your JV involves property, IP, or staff transfers, we’ll bring in the right people.
Devolved decision-making and flexible working hours mean we can move at pace. Joint venture negotiations often have tight deadlines. We’re set up to respond when you need us, even outside regular office hours.
You’ll always get the full picture from us. If your potential partner is asking for something unreasonable, we’ll explain why and help you push back. No sugar-coating, just practical guidance.
Joint venture work needs to be cost-effective, especially for SMEs. We’ll give you a clear fee estimate at the outset and keep you updated on costs as the matter progresses.
We’re the leading commercial law firm with offices in South and North Wales offering Welsh language legal services at every level, from trainees right through to partners. This isn’t an add-on or a tick-box exercise. It’s part of who we are.
We charge for joint venture work in different ways depending on complexity:
Fixed fees – For straightforward contractual joint ventures or simple corporate structures, we can often agree a fixed price upfront.
Capped fees – For more complex transactions with some variables, we may agree a fee cap so you have budget certainty.
Hourly rates – For large or complex joint ventures, or where the scope is uncertain, we charge by the hour but keep you regularly updated on costs. We will always endeavour to give you an estimate of the likely fees and keep that estimate updated.
Contact us for a quote specific to your transaction.
We were delighted with the service from Darwin Gray. The service was both professional and personable; a genuine pleasure to deal with. A big thank you to the corporate team who supported us in raising our seed round. Their experience and expert advice was invaluable as we navigated a complicated deal with a number of parties, and we will be forever grateful to them for their exceptional service.
Anon
They provide sensible and pragmatic advice.
Legal 500
They are flexible and responsive.
Legal 500
A joint venture agreement is a legal contract between two or more parties setting out the terms of their business collaboration. It covers matters like what each party contributes, how the venture is managed, how profits and losses are shared, what happens if parties disagree, and how the arrangement can be ended. The specific form depends on the structure chosen. For a corporate joint venture (new limited company), this is typically a shareholders’ agreement. For an LLP, it’s a members’ agreement. For a contractual joint venture, it’s a collaboration or consortium agreement.
A partnership is a specific legal relationship where two or more people carry on business together with a view to profit, governed by the Partnership Act 1890. Partners have unlimited personal liability for partnership debts. A joint venture is a broader term covering various types of business collaboration, which might be structured as a partnership, but could equally be a limited company, LLP, or purely contractual arrangement. The key difference is that most joint venture structures (except general partnerships) provide limited liability protection.
While there’s no legal requirement to use a solicitor, professional advice is strongly recommended. Joint ventures involve significant legal, tax, and commercial considerations. Getting the structure wrong can result in unexpected tax bills, personal liability, or arrangements that don’t achieve what you intended. The cost of proper advice is modest compared to the cost of getting it wrong. Even for simple collaborations, having a properly drafted agreement protects both parties and provides a framework for resolving issues.
Timescales vary significantly depending on complexity. A simple contractual joint venture might be agreed in 2-4 weeks. A corporate joint venture with two parties and straightforward terms typically takes 6-10 weeks from initial discussions to completion. More complex arrangements with multiple parties, significant assets, or complicated terms can take 3-6 months or longer. The main factors affecting timing are how aligned the parties are on terms, the extent of due diligence required, and everyone’s availability to progress the transaction.
There’s no single “best” structure. The right choice depends on your specific circumstances, including the venture’s purpose and expected duration, the level of risk, whether you need external finance, tax considerations, and how much formality you want. Corporate joint ventures (limited companies) are most common for long-term, significant collaborations. LLPs suit ventures where tax transparency matters. Contractual arrangements work well for short-term projects or looser collaborations. We’ll help you work through the options and choose what makes sense for your situation.
Disagreements are common, which is why joint venture agreements need clear mechanisms for resolving them. Typical approaches include escalating disputes to senior executives, using mediation or expert determination, and ultimately providing for one party to buy out the other if deadlock can’t be resolved. Without these mechanisms, disputes can paralyse the venture. In the worst case, parties may end up in court, which is expensive, time-consuming, and damaging to the business.
Exit rights depend entirely on what’s in the joint venture agreement. Well-drafted agreements include provisions allowing parties to exit in certain circumstances, whether through selling their interest to the other party, finding an outside buyer (subject to any restrictions), or winding up the venture. Common exit triggers include deadlock, breach by the other party, change of control, and simply wanting to leave after a minimum period. If your agreement doesn’t address exits, extracting yourself can be difficult and expensive.
IP ownership depends on what the parties agree. Typically, each party retains ownership of IP it brings to the venture and licenses it to the JV for use in the business. IP created by the venture itself might be owned by the JV entity (if there is one), jointly by the parties, or by one party with a licence to the others. What happens to IP when the venture ends also needs to be addressed. IP disputes are common in joint ventures, so it’s essential to be clear about these issues from the start.
Yes. A properly drafted joint venture agreement is a legally binding contract under English and Welsh law. If a party breaches the agreement, the other parties can seek remedies including damages, specific performance, or injunctions. The agreement should be carefully drafted to ensure all terms are clear and enforceable. Note that heads of terms or memoranda of understanding are usually expressed to be non-binding (except for specific clauses like confidentiality), serving as a roadmap for negotiating the final binding agreement.
In a joint venture, the parties remain separate businesses that collaborate on a specific venture. Each party retains its own identity, assets, and operations outside the JV. In a merger, two or more businesses combine to form a single entity, with the merging companies typically ceasing to exist separately. Joint ventures are less permanent and less integrated than mergers, making them suitable for collaborations where parties want to work together on specific projects while maintaining their independence.
It depends on the structure. Corporate joint ventures (limited companies) and LLPs must be registered at Companies House. General partnerships don’t need to be registered (though limited partnerships do). Purely contractual joint ventures don’t require registration. Even where registration isn’t required, having a written agreement is essential to clarify each party’s rights and obligations and to avoid accidentally creating a partnership with its unlimited liability consequences.
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We advise clients throughout Wales and across the UK. Most joint venture transactions can be handled remotely, so your location doesn’t limit our ability to help.
Whether you’re exploring a new collaboration, negotiating terms with a potential partner, or looking to restructure an existing arrangement, we’re here to help you get it right.
Contact us for a free, no-obligation chat to see if we can help you. You’ll speak directly to a corporate solicitor who can discuss your situation and explain how we might work together.
Get a free, no-obligation chat with our commercial team, call us on 02920 829 100 or use our Contact us form.
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To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.
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