Planning

Preliminary issues

There are a number of issues that parties to a proposed corporate joint venture (JV) should consider before entering into formal legal documentation. These include:

1. •

   the structure to use for the JV

2. •

   the parties' respective interests in, and contributions to, the JV

3. •

   the accounting and taxation treatment of the JV

4. •

   whether any initial legal requirements must be complied with before the JV can be established

5. •

   whether any preliminary documentation such as confidentiality agreements, exclusivity agreements and heads of terms are required

6. •

   the need for due diligence, and

7. •

   employment, pension and share scheme issues that arise on formation of the JV

For a list of the preliminary issues that should be considered, see Checklist: Corporate joint venture preliminary issues—checklist.

For a glossary of some of the most common terms and phrases used in the context of JV arrangements, see Practice Note: Corporate joint ventures—glossary of terms.

Structure of the joint venture

The most common structures used to set up a JV include:

1. •

   corporate JVs, ie establishing a separate limited company of which each