Business Plan Template

A joint venture company is a business that is jointly owned by two or more parties. A successful venture depends on the purpose of the business and the objective it aims to achieve. The business plan checklist will enable the parties involved to "own" the objectives for the venture. Ownership and funding are critical factors that parties must consider. Funding determines the legal obligations of the parties in respect of capital contributions. Management structure and corporate governance rights are closely related to equity ownership. The rights to appoint directors and the authority given to individual managers must be clearly defined. Minority protection is also a critical factor in joint venture companies. Non-compete agreements are necessary for joint ventures between actual or potential competitors, and distribution policy is essential for minority shareholders. Termination is also a significant consideration for joint venture companies, and parties must agree on when and how to end the venture.

The joint venture company's business plan is critical in identifying the purpose of the venture, the primary commercial objectives, key interests to protect, and the commercial return expected from the venture. The checklist for a joint venture company and shareholders' agreement covers various areas, including ownership and funding, management, minority protection, non-compete agreements, distribution policy, and termination. The checklist helps parties to address issues such as the number of directors/members the company will have, the appointment and removal of directors/members, and the decision-making process.

Ownership and funding are essential factors that parties must consider when setting up a joint venture company. Parties must determine the legal obligations of the parties in respect of capital contributions and how initial capital will be provided. Management structure and corporate governance rights are closely related to equity ownership. Parties must clearly define the rights to appoint directors, who will appoint the executive management team, and the authority given to individual managers. Minority protection is also critical in joint venture companies. Minority shareholders will wish to protect their interests by being involved in major decisions and ensuring proper distribution of profits.

Non-compete agreements are necessary in joint ventures between actual or potential competitors. Parties must clearly define the scope of non-compete constraints, including the scope of restriction, exceptions, and the field of competition. Distribution policy is also an essential factor to consider, and parties must have a common understanding of the distribution policy to be adopted. Termination is also a significant consideration for joint venture companies. Parties must agree on when and how to end the venture, including the sale of the joint venture as a whole to a third party.

How to use this Document?

1. Understand the purpose of the joint venture - identify the parties, primary commercial objectives, territory or technological field, key interests of the parties, commercial return, rights of control or participation, and exit strategy. Use the business plan to ensure that the joint venture parties own common and clear objectives for the venture.

2. Establish ownership and funding - determine the ownership/voting shares of the parties, economic ownership and voting rights, and legal obligations of the parties in respect of capital contributions. Consider initial capital, shareholder loans, obligations to contribute further capital, issuance of new shares, outside finance, and venture capital funding.

3. Set up management - determine the management structure and corporate governance rights, the number of directors/members/managers the company will have, appointment and removal of directors/members, how key business decisions will be taken, specific responsibilities, and basis of decision-making.

4. Protect minority interests - if a minority interest is involved, consider participating in management through board representation, involvement in major decisions, protecting against equity stake dilution, proper distribution of profits, establishing adequate access to information regarding the joint venture's affairs, and establishing "exit" routes.

5. Establish non-compete - set up the scope of non-compete constraints, including scope of restriction and exceptions.

6. Determine the distribution policy - have a common understanding as to the distribution policy to be adopted by the joint venture. Consider if there is a requirement to distribute a minimum proportion of distributable profits.

7. Provide for termination - consider when, how, and under what circumstances the joint venture may be terminated.

Overall, the "Business Plan Template" document provides a checklist for creating a Joint Venture Company and Shareholders Agreement. It guides you in making important decisions and ensuring that the objectives of the joint venture are clear to all parties involved.