Company Analysis : Joint Venture Agreements

1841 Words Aug 15th, 2014 8 Pages
and, if appropriate, the company itself. There may well also be release of the outgoing shareholder from its obligations.9
Thus, a shareholders’ agreement creates legally binding contractual rights enforceable irrespective of the Articles thereby improving the legal position of, and protecting the shareholder. However, as will be discussed sub- sequently, making the company a party to the shareholders’ agreement may cause problems of enforceability as against the company itself.
Shareholders’ Agreement and Joint Venture Agreements
Joint venture agreements are one of the most practical uses of a shareholders’ agreement. A joint venture may be formed between two or more persons or entities, and is used when the intended project is beyond the resources of the individual venturers, or where strategic alliances or cross-border arrangements are anticipated.10 Among other ways, joint ventures can be implemented by the incorporation of a limited liability company or the creation of a partnership. The corporate structure is often favored by joint venturers but the partnership or the contractual routes may be more appropriate for
7 Supra n. 2, at 242.
8 Shalfoon v. Cheddar Valley Co-operative Dairy Co. Ltd., [1924] NZLR 561.
9 Supra n. 2, at 242.
10 Katherine Reece and Thomas Christopher, The Law and Practice of Shareholders’ Agreements
Shareholders’ Agreements 143 (London: Butterworths, 1999) at 13.
144 Raghvendra Kishore Singh smaller ventures, those ventures with a limited life…
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