Joint Venture Options - Lawyer assistance appreciated
Discussion
I will be going to my lawyer for formal (invoiced) advice but would apprciate a Heads Up on options.
I decided to start a new business within my current market with a new service offering. The specialist knowledge required to gain market entry is from a close colleague of mine, from same sector, who also has his own small business. I am able to fund the project start-up and assets requirements (circa £100k) fully but want the specialaist knowledge and input from my friend. In theory I want to give him 25% share capital in return for that knowledge. Neither of us will draw remuneration from the new venture but will rely on dividends, subject to profit (Dividend policy to be decided.
Is this business scenario easy to structure and create? I want the business to be a subsiduary of my existing business and am able to fully fund the share capital but need (and desire) the knowledge of a valued colleague.
I have scars from previous JV's but this one sit's right for me at this point.
Any help or guidance apprecaited.
I decided to start a new business within my current market with a new service offering. The specialist knowledge required to gain market entry is from a close colleague of mine, from same sector, who also has his own small business. I am able to fund the project start-up and assets requirements (circa £100k) fully but want the specialaist knowledge and input from my friend. In theory I want to give him 25% share capital in return for that knowledge. Neither of us will draw remuneration from the new venture but will rely on dividends, subject to profit (Dividend policy to be decided.
Is this business scenario easy to structure and create? I want the business to be a subsiduary of my existing business and am able to fully fund the share capital but need (and desire) the knowledge of a valued colleague.
I have scars from previous JV's but this one sit's right for me at this point.
Any help or guidance apprecaited.
If they are only offering there special skill or knowledge there is maybe no need to have a joint venture or joint ownership. Why not have them work for you on an exclusive consultancy basis with the various non competition clauses and a sensible term that works for both of you.
Not saying that is the way to go, but maybe another option.
Not saying that is the way to go, but maybe another option.
I'd rather have the same opinion, joint venture would be more suitable for concept of business there are more than one party involved to fund the project, if we fund the project with our own strength while needs someone for their knowledge, experience or anything, different type of partnership such as hiring someone by consultancy or freelance basis is preferable.
However it is very contextual, there are factors determining options that joint venture could be also acceptable. Whatever the scheme of partnership, it must need explicit role about task and obligation of every party involved, how much percentage must be allocated for further investment of the project, and how much each of them will have their part from output of revenue from the project.
Considering these, the first option seem to be relatively easy and have less potency arising up risk of dispute in the future.
However it is very contextual, there are factors determining options that joint venture could be also acceptable. Whatever the scheme of partnership, it must need explicit role about task and obligation of every party involved, how much percentage must be allocated for further investment of the project, and how much each of them will have their part from output of revenue from the project.
Considering these, the first option seem to be relatively easy and have less potency arising up risk of dispute in the future.
SagMan said:
I fully understand your views and thanks for the advice. I will consider other routes but can it be still possible to create the company financed by one party (share capital) but allocation of shares to suit non-finance contribution? Many thanks again.
Anything is possible. Shares can be issued in consideration of work to be undertaken. There will always be a nominal value on the shares, but your lawyers and tax advisors should be able to devise a way of meeting your needs - although obviously the more complex something becomes the higher the asociated costs.Thanks for the replies Guys. I will take seriosu advice of structure from lawyer.
Other than a call to Business Link, can anyone guide me to funding assistance for new company. Business will be a subsiduary of a Company which has £12m turnover and location is East Yorkshire.
New company will have asset value of £100k and turnover in region of £500k p.a for first 2 years. Any help re funding for business development, logistics or marketing would be appreciated.
Other than a call to Business Link, can anyone guide me to funding assistance for new company. Business will be a subsiduary of a Company which has £12m turnover and location is East Yorkshire.
New company will have asset value of £100k and turnover in region of £500k p.a for first 2 years. Any help re funding for business development, logistics or marketing would be appreciated.
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