The essential difference between the joint venture agreement and the shareholder contract: joint enterprise agreements are essential for individuals or companies with different resources, skills, skills or links, but which pursue a common objective (usually generating profits). A joint venture agreement provides opportunities for business growth and flexibility and allows all parties to share the costs of a potentially costly business instead of bearing the costs alone. Shareholder agreements are very advantageous because they ensure that the relationship between the company`s shareholders is agreed and documented. As a general rule, important terms and conditions included in the agreement apply to directors` functions, general activities, board meetings and general meetings, as well as dividends, principal, loans, insurance and confidentiality. A shareholders` pact contains provisions that specify, among other things, the number of shares issued, the fair share price, the shareholders and their share of ownership, the decision-making process of a new shareholder and restrictions on share transfers. The joint venture agreement defines the essential conditions of the overall relationship between the joint venture partners and addresses key issues such as the scope and purpose of the joint venture, ownership structure, management and governance of the joint venture, as well as the distribution of risk and revenue between the joint venture partners. Real estate transactions deserve a separate mention, as joint ventures in real estate are by far the most common use for corporate structures. Real estate companies generally look at the «bases» of obtaining planning approval, development, investment management and property management. It is a pooling of expertise and cash for a clearly identifiable purpose, with a target result, a likely degree of success and a likely timetable. It is far from the uncertainty of sinking an oil well 1,000 miles off the coast of Western Australia.
At Lawbase, we understand that unexpected problems can occur when circumstances change in a business, and if that cannot be predicted, it can have serious consequences. We have extensive experience in comprehensive and professional legal advice for small businesses across Australia. So if you want us to sign a custom shareholder pact to protect your rights and the integrity of your business, talk to us today.