cms%2Ffiles%2F3250%2F1447509888Jurídica+ +Commercial+Matters+to+Consider+in+Setting+up+a+Corporate+Joint+Venture+in+the+UK

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Commercial Matters to Consider in Setting up 
a Corporate Joint Venture in the UK 
 
 
The chances of setting up a successful corporate joint venture in the UK are enhanced 
if you evaluate all the key issues well in advance of commencing the collaboration. The 
first consideration is to determine what those key issues are. 
 
If you are considering setting up a joint venture there are many commercial factors to 
consider to ensure that the venture has the best possible chance of succeeding. 
 
If this is to be a corporate joint venture as opposed to a commercial collaboration (which 
is based on a commercial arrangement such as a collaboration agreement), then you will 
need to determine the corporate structure of the joint venture. You will need to 
determine whether the vehicle will be an existing company such as an existing subsidiary 
of one of the parties, or specially created. In either case the options are: 
1. a limited company or unlimited company; 
2. a limited liability partnership, partnership or limited partnership; or 
3. an unincorporated association. 
In general the entity structure will be determined by a number of factors including tax, 
limitation of liability, whether the structure suits the nature of the proposed 
collaboration and industry expectations as to the nature of entities conducting business 
in that sector. 
You will need to consider how to finance the corporate joint venture including: 
1. Whether any finance (including initial finance) will be provided by the parties, and if 
so in what proportions. 
2. Whether there will be any third party funding, and if so, whether this will be debt and/ 
or equity funding, and whether any security will need to be provided in connection with 
the lending. 
3. What arrangements will there be for funding on a continuing basis including ongoing 
working capital requirements and development and expansion costs. 
You will also need to consider who will contribute assets and/ or services to the venture 
and more specifically: 
1. Whether any specific assets, whether tangible or intangible (such as intellectual 
property) will be provided by any party. 
2. If the answer to point 1 is yes, the terms upon which the assets will be contributed 
including outright transfer/ assignment, or a lease or licence to the venture for a fixed 
or indefinite term. 
3. Whether any consideration or licence fee should be payable in relation to the 
contribution of the assets and if so the amount of such fee. 
4. The tax implications of contributing such assets. 
5. If appropriate in the circumstances, what due diligence investigations will need to be 
conducted in relation to the assets being contributed, and what warranties and 
indemnities will be given in this regard and to which parties. 
 
You will also need to consider whether any of the collaborators, or alternatively any 
third party will be providing “back office” services to the joint venture. Such services 
may include general administrative services, financial/ accounting services and HR 
services. You should consult with your corporate solicitor to determine the scope and 
terms of the back office support agreement. 
 
The parties will need to determine the terms upon which such services will be supplied, 
including the consideration for the provision of the services, and once agreed in 
principle, the terms should be included in a Services Supply Agreement. 
 
AUTHOR: Christian Browne