Joint ventures and partnerships

What we do

A joint venture is a common form of collaboration between companies that do not wish to operate under the same name and identity but pursue a common goal. Entering into a joint venture is almost entirely informal. For example, there are virtual joint ventures that are established solely by agreement. It is common, however, for the joint venture to be incorporated into an entity, for instance through a jointly established subsidiary. The jointly established subsidiary can take various forms, such as a private limited company (BV), public limited company (NV), limited partnership, or general partnership. There are various reasons, advantages, and disadvantages to entering into a joint venture.

We have the knowledge and expertise to assume diverse roles: from advisory services to dispute resolution. We have an experienced team of lawyers and legal experts in the field of joint ventures and partnerships. Contact us to discuss the possibilities.

Equity joint venture or contractual cooperation

Broadly speaking, we distinguish two main forms. In an equity joint venture, parties jointly establish a joint company, usually a private limited company (BV) or public limited company (NV), in which they both become shareholders and their contributions, control, and profit sharing are channeled through that entity. In a contractual (virtual) joint venture, the collaboration arises solely by agreement, without a joint entity; think of a general partnership, a professional partnership, a limited partnership, or a purely contractual consortium for a defined project. The choice affects liability, taxation, control, and the ease with which parties separate later. We compare these forms for both the international group establishing a strategic alliance and the baker on the corner opening a joint branch with a neighboring business.

The joint venture agreement and the shareholders' agreement

Because the legislator has regulated virtually nothing specifically regarding joint ventures, the success of the collaboration depends on sound contracts. A joint venture agreement bears characteristics of both a cooperation agreement and a shareholders' agreement. In it, the parties establish, among other things: the joint objective and scope, the contribution of capital, knowledge, personnel, and assets, the distribution of shares and voting rights, financing and capital contribution obligations, profit and loss distribution, confidentiality, non-competition, and the contribution and licensing of intellectual property. Our lawyers and in-house counsel draft and negotiate these documents, and ensure that the articles of association and the shareholders' agreement align. See also our page on corporate governance.

Governance, veto rights and decision-making

Governance is often the heart of a joint venture. We arrange the composition of the Executive Board and any Supervisory Board, the decision-making process, and so-called reserved matters: important decisions that may only be taken by reinforced majority or with the consent of both partners, such as investments above a threshold, raising financing, changing the strategy, or making distributions. Clear veto and information rights prevent one party from overshadowing the other and ensure that agreements hold up even when partners' interests diverge.

Deadlock: preventing and breaking

With a 50/50 split, an impasse looms: if votes are tied because one partner supports option A and the other option B, a deadlock arises. A good joint venture agreement establishes in advance how such a stalemate will be broken. Commonly used mechanisms include an escalation ladder (first consultation at the executive level, then between the ultimate shareholders, and possibly mediation), and if that fails, a buy-sell clause such as a put or call option, Russian roulette , or a Texas shoot-out. We advise on the arrangement that best suits the power dynamics and the value at stake, ensuring that a conflict does not paralyze the company.

Exit, transfer and alignment with mergers and acquisitions

Just as important as the start is a workable exit. We arrange lock-up periods, offer obligations, pre-emptive rights, and co-sale and take-along rights (tag-along and drag-along), as well as valuation methods and an orderly sales process. Should the collaboration result in the sale of the joint venture, this aligns seamlessly with our guidance on mergers and acquisitions, the associated due diligence investigation , and processes regarding private equity, management buy-out, and exit.

Competition law and supervision

A joint venture can constitute a concentration within the meaning of the Competition Act. If the undertakings involved exceed the turnover thresholds, a notification obligation applies to the Authority for Consumers and Markets pursuant to Article 34 of the Competition Act (and to the European Commission for larger transactions), and the cooperation may only be established after approval. In addition, we assess whether agreements regarding markets, prices, or customers conflict with the cartel prohibition. We determine in advance whether notification is required, thereby preventing a promising cooperation from encountering competition law objections at a later stage.

Disputes between joint venture partners

Should relations nevertheless become deadlocked, corporate law offers solutions. Through the statutory dispute resolution mechanism, a shareholder can be compelled to transfer their shares (expulsion, Article 2:336 of the Dutch Civil Code) or, conversely, withdraw voluntarily in exchange for the acquisition of their shares (Article 2:343 of the Dutch Civil Code). Additionally, the Enterprise Chamber can order an investigation into the policy and course of business in an inquiry procedure and, if necessary, take measures (right of inquiry, Article 2:345 of the Dutch Civil Code). Our lawyers assist you both in negotiations and in court; meanwhile, our in-house counsel keep the operation on track.

Termination and disentanglement

When a joint venture has achieved its objective or the parties wish to proceed separately, we guide the disentanglement process: separating control, financing, personnel, contracts, and intellectual property, settling outstanding obligations, and the transfer or liquidation of the joint entity. Sound agreements regarding this, preferably established at the outset, prevent protracted conflicts and residual damage.

Our approach and this expertise

MKB Juristen works with mixed teams of lawyers and in-house counsel, ranging from advisory services and contract drafting to negotiation, governance, and dispute resolution. As a result, we serve both international corporations and small business owners, from establishing strategic alliances to the baker on the corner starting a joint venture with a neighbor. This page is part of our core expertise: Corporate, Mergers and Acquisitions. Please feel free to contact us to discuss the possibilities for your partnership.