The statutes of a company govern the functioning of the company and indicate the purpose of the company, the rights and obligations of its members and directors, and how the company as a whole should function. It goes without saying that a joint venture will only have a status if it is a company and the statutes complement the provisions of the joint enterprise contract. This is the latest in our series that looks at joint ventures in the energy and natural resources field. Prior to that, we examined the legal mechanisms available to the parties to end a joint venture in a dead end. This article continues this issue by examining the main causes of dismissal and listing the top ten issues to consider in determining whether a joint venture should be terminated. When drafting a revocation clause that provides for the possibility of selling shares to third parties, pre-emption rights may be applied to the transfer of shares. The right of pre-emption gives the shareholders of the company the right to be offered the transfer shares before they are offered to a third party who is not yet a shareholder of the company. Pre-emption rights are generally included in the company`s statutes. The third party who acquires the shares of the joint venture is generally required to enter into a shareholders` agreement or an agreement to respect an existing shareholders` agreement which implies that the third party agrees to respect the terms of the joint venture agreement. A statement of intent or Terms can be used to outline the essential points of joint venture plans before the exact text of the joint venture agreement is final.
The Director General therefore defines the essential conditions agreed between the parties and reflects the expectations and intentions of the joint venture. Two or more organizations typically enter into a cooperation agreement that collaborates to improve their existing technologies or pool resources. The agreement generally defines the responsibilities, roles and rights of the parties, while managing the entire project. The main difference between a joint venture and a cooperation is that a joint venture can create its own legal entity when cooperation is not possible. It is possible to terminate a joint venture due to a failure. A well-developed joint venture agreement (“JVA”) specifies the obligations of the parties to the joint venture and clearly and clearly expresses the circumstances or events that constitute a “late payment event”. Failure scenarios are common: (i) bankruptcy of one party (or possibly its parent company), (ii) material or persistent violation of the AIC, iii) change of control of a joint venture (particularly if the party acquiring control is a competitor to the other joint venture) or iv) an attempt to transfer the shares of a party in the joint venture that does not correspond to the JVA. 1. Do you always have an exit clause that you can use or a means of control: with regard to the legal language of the boiler platform, almost all joint venture agreements include the reciprocal agreement of termination, liquidation, liquidation, etc. by decision of the board of directors or shareholder. It is also true that a unilateral exit is almost always possible by mutual agreement (i.e. where the parties can agree on terms for the purchase/sale of shares).
The problem is that “reciprocal” decisions are often difficult to obtain, especially since a hard-fought relationship is at the root of the discussion. We firmly believe that dealmakers must consider all the possibilities that a potential joint venture could go wrong and try to protect itself from the worst results with levers that the company can pull unilaterally.