There are two types of joint ventures that the parties can conclude; registered joint venture and unincorporated joint venture. The difference between the two types is the creation of a new legal entity. The parties should clarify the objectives and scope of the joint venture in order to avoid disputes between them. Parties should consider appointing a legal expert to have the parties to a proposed joint venture referred to interim diligence to avoid future setbacks. This essentially minimizes future risks and promotes transparency between all parties to the joint venture. When should parties to a joint venture include an VPS? Parties to a joint venture generally consider their assets to contribute to the joint venture in order to help the joint venture achieve its objective. In addition, most joint ventures involve the development of a product by the joint venture, which can have value for each party to the joint venture. A detailed and precise clause defining the respective ownership of this intellectual property is essential to protect the rights of all parties to the joint venture. This concept also applies to the extent to which parties can use any intellectual property outside the joint venture. In the event that a VPS is incorporated under the 2016 Companies Act, SPV shareholders will execute a joint venture agreement and a shareholders` agreement. The shareholders` pact includes, among other things, the percentage of shareholder participation, the composition of the SPV board of directors, the board of directors, the portability of the shares, voting rights and the appointment of key staff. There are two types of joint ventures: joint ventures and joint ventures without legal personalities. Incorporated joint ventures involve the creation or creation of a new legal entity, commonly known as the Destination Vehicle.
Joint ventures without legal personality operate primarily on the basis of the existing legal status of the parties to the joint venture and their respective obligations and obligations defined in a main agreement on a joint venture. There is always the possibility of litigation arising from a joint venture. Therefore, parties to a joint venture should always carefully consider and agree on the nature of dispute resolution.
