15 February 2016
In this blog I would like to advocate the importance of joint venture agreements and/or comprehensive shareholders agreement detailing specifics on how events between parties should be handled.
I have found that having a mechanism for resolving any unforeseen events can be invaluable when such an incident occurs. However, as an adviser, I understand that the possibility of a dispute is the last thing on a client’s mind when undertaking a new venture. It is ultimately akin to that of a divorce.
As an adviser I must look at the “what ifs” and promote that a relatively small investment at the beginning of a venture (detailing how such “what ifs” are to be resolved) can be worth its weight in gold in years to come…In other words fix the roof while its sunny.
I am therefore advising clients that they converse with legal representatives for further advice.
An agreement can address:
- Dispute resolution;
- share valuations;
- set criteria for sale in the future;
- death in service;
- dividend policies; and
- salary policies.
Please note; the above is not a comprehensive list as each venture is different.