If all parties are established in the United Kingdom, withholding tax should not be a problem for the joint venture, but it will have to check whether it is required to withhold UK interest payments tax. When developing an agreement, members of a joint venture must decide at meetings the total value of their capital contributions and the weighting of their vote. The votes may be the same for each member or proportional to their capital contribution. These decisions create a framework for members` action, including initial funding, resource allocation and decision-making. Although joint venture structures are generally not identified as joint ventures, joint venture structures are also often used by financial investors to offer consortiums comprising passive equity by financial sponsors and investors and seeking debt financing for an acquisition that might otherwise not be feasible. These structures also offer fund managers the opportunity to make diversified investments that still meet their investment criteria (for example. B in areas such as real estate and infrastructure). There are ways to solve conflict problems at the beginning of the joint venture. For example, all directors in conflict or potentially in conflict could be excluded from the corresponding decision-making process. Alternatively, corporate law provides that disputes over constitutional documents, the dissolution of shareholders or by directors may be permitted.
The constitutional documents could therefore provide for the enabling of conflict situations arising from the fact that a director or employee of its designated shareholder is a director and that the directors acknowledge the existence of this authorization at their board meeting. English law, as an applicable law, is also well understood and adopted by many international courts, particularly in view of the emphasis on legal security and contractual freedom of the parties and the simplicity of opposability in English courts. The United Kingdom is also a commercial arbitration centre that offers parties an alternative and private way of resolving disputes. A combination of these factors makes the UK a stable environment for the creation and operation of new businesses. The sector in which the joint venture operates and the identity of the parties to the joint venture may also influence the financing structure of the joint venture. Sectors that need high initial capital (for example. B, oil and gas companies) generally organize long-term third-party funds at the beginning of the joint venture; Government-led joint venture projects can benefit from a portion of public funding without the expected return on investment. However, venture capitalists will buy equity, but will negotiate a mechanism to make their investments in the short term.
In a registered joint venture, a shareholder holding more than 50% will be able to effectively control the joint venture, including the power to appoint and remove directors, as he sees fit, and to adopt votes by a majority of shareholders. Therefore, in the absence of a contrary agreement, minority investors have relatively few rights to legally control the decision-making of a joint venture. Therefore, it is customary for minority investors to seek additional contractual rights, commensurnance with the size of their participation in the joint venture, under the joint enterprise agreement, constitutional documents or both. For example, in British joint ventures, it is customary for parties to determine the right to appoint directors on the basis of interests in the joint venture unit (for example. B, one director per 10% owned and to have the right to appoint a non-voting observer to the board of directors. Now you have planned your joint venture and are ready to make a deal with another party.