Management

Management structures in joint ventures vary depending on ownership stakes and agreements between parties. Equal ownership often leads to equal representation at board level with important decisions requiring mutual agreement.

Minority shareholders may seek protection similar to standard shareholder agreements. Passive investors may prefer not to be involved in management. Tax implications may depend on the jurisdiction of central management and control.

Corporate joint ventures typically involve each party appointing directors to the board, with key decisions often requiring unanimous consent or majority agreement. Shareholders may reserve decision-making authority for certain fundamental matters. More complex structures may involve non-executive boards, subsidiaries, or independent management roles.

Directors owe statutory duties, including those of skill and care and fiduciary duties. Conflict of interest issues may arise, requiring disclosure and non-participation in board proceedings. Directors’ indemnity and insurance provisions may be defined by law or agreement.

Partnership joint ventures involve partners managing affairs according to partnership agreements. Partners owe each other duties of good faith, unlike shareholders, but this may vary based on agreements.

Deadlocks in decision-making may necessitate dispute resolution mechanisms, including mediation, arbitration, or liquidation. Dispute resolution may involve external parties, but finding suitable mediators or arbitrators can be challenging.

Deadlocks may also lead to compulsory share transfers or winding up of the joint venture. Mechanisms for fixing buyout prices may involve sealed bids, fair market valuations, or options for liquidation.

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