For that reason, political parties in the UK tend to only enter into them if no other options are available.
By contrast, in the business world joint ventures are far more popular, can bring a number of benefits for each party and can lead to long term successful and profitable relationships between two or more businesses.
A joint venture can potentially allow businesses to undertake a new venture much more quickly and efficiently than either one could do by itself. It can allow businesses to pool resources (such as property, employees and equipment) and enable them to de-risk a new project by sharing the funding costs and other liabilities. They can also be extremely useful where each party brings different expertise or specialism to the table so that the joint offering is far greater that either could separately provide.
However, although joint ventures can offer many benefits, as with any relationship it is important to set the ground rules at the start and have these set out in a legally binding agreement. Some key points to consider are:
With careful planning and setting up robust legal structure and agreements at the outset, businesses can help ensure that their JVs deliver success and profit for all parties. And that, unlike in politics, they can remain friends!
Martin Frost is a director in the Corporate team at Lupton Fawcett and is based in the York office. Martin and the team regularly advise on joint ventures and shareholders/investment agreements as well as buying and selling businesses and companies. Please contact Martin for further information.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.