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A Checklist for Your New Joint Venture

The following post consists of a comprehensive “Equity Joint Venture” Checklist prepared by Gene Barton, a Principal in the Boston office of Fish & Richardson P.C. The purpose of this checklist is to ensure that you cover all of your bases when considering a Joint Venture to ensure there are no surprises. It originally appeared in VC Experts ‘Intellectual Property and Joint Ventures’ Reference book.

An Equity Joint Venture Checklist

Basic Overview

  1. Parties (including parents, if appropriate), legal systems under which organized and form of organization
  2. Name of joint venture and principal place of business
  3. Description of project

Defining the Relationship between parties

  1. Corporation, limited liability company, partnership or other relationship to be formed
  2. Jurisdiction of formation
  3. Principal structure features (required/permitted under applicable law)
  4. Tax implications for venture and the parties to it


  1. Commencement
  2. Threshold termination if purpose unattainable
  3. Completion of project or early termination
  4. Government approvals (if required)

Obligations of each party to the JV

  1. Equity (capital) contribution
  2. Financial liability for future cash needs (including guarantees)
  3. Service and management personnel
  4. Research obligations and offer of new developments acquired
  5. Property or contracts transferred, including IP rights, trademarks
  6. Positive covenants
    1. Right to enter agreement
    2. Right to property, including defense of IP rights transferred
  7. Negative covenants
    1. Not to pledge shares
    2. Not to compete in JV markets (or vice versa)

Management and control provisions

  1. Board of Directors or similar body
    1. Membership, representation of shares, chairman
    2. Rights to remove directors appointed by a party
    3. Meetings (in person, by phone, in writing)
    4. Voting major issues requiring super majorities
    5. Deadlocks
    6. Language of meetings and reports and advance agendas
  2.  Chief Executive and Financial Officers
    1. Responsibilities
    2. Remuneration
    3. Appointment of initial CEO/CFO
    4. Dismissal
    5. Indemnities

Capital interests

  1. Relative shares and voting power
  2. Treatment in books of account: initial balances
  3. Treatment of surpluses and deficits
  4. Allocation of tax benefits
  5. Additional contributions
    1. By both parties
    2. By one party
  6. Special procedures for shareholder meetings/votes

Use of funds

  1. Use of initial capital contributions
  2. Budget for first year
  3. Three-year projection
  4. Financial delegations
  5. Profits and declarations of dividends
  6. Reserves (required by law/discretionary)

Schedule of work (Business Plan)

  1. Agreed plan at commencement of work
  2. Schedule for first year
  3. Three-year projected work schedule
  4. Amendments to Business Plan


  1. JV activities
  2. Officers/directors
  3. Integration with parents= plan

Information and reporting

  1. Description of liaison officers
  2. Exchange of information (considering competition law aspects)
  3. Financial reporting
    1. Scope of needs
    2. (ii) Frequency of reports
    3. (iii) Fiscal year
    4. (iv) Location and access
    5. (v) Audit
    6. (vi) Retention, including after termination
  4. Language of company affairs, records, reports, meetings

Patents, trademarks, other intellectual/industrial property

  1. Existing
    1. Ownership
    2. License of rights
    3. Defense of legal suits by third parties
    4. Prosecution of infringers
    5. Reassignment on termination
  2. Future
    1. Ownership by parents and/or venture
    2. Other issues as above


  1. Independent of parents
  2. General/special
  3. Local/foreign

Joint venture opportunities/conflicts of interests

  1. What must be referred
  2. What each party may retain


  1. Negotiation
  2. Cooling off
  3. Arbitration
    1. When
    2. Where
    3. By whom
    4. Under what arbitral rules
    5. Rules of decision
    6. Aid of courts of enforcement, if feasible, and alternatives if not

Exit plans, including Dissolution/Buy-Out

  1. Minimum time commitment of parties to remain b.
  2. Early exit
    1. For cause
    2. By agreement
  3. First refusal rights preceding third party acquisition
  4.  AShoot out@ or appraisal for buy outs
  5. Dissolution in deadlock
  6. Distribution on termination of special property such as IP, trademarks
  7. Survival of covenants
  8. Disposition or retrieval of inventory

Admission of new parties to the venture

  1. One at a time
  2. Public offer arrangements

Excusable delay/force majeure


  1. Entire agreement: no representation
  2. Assignments
  3. Waiver
  4. Severance
  5. Validity
  6. Clause headings
  7. Additional instruments
  8. Counterparts


About Gene Barton: Gene Barton is a Principal in the Boston office of Pepper Hamilton LLP,. Mr. Barton’s practice emphasizes financing and merger and acquisitions activity. He specializes in the representation of emerging companies and venture capital and other private equity funds. He also provides general corporate, business planning and financial advice to public and private companies.


About Pepper Hamilton: Pepper Hamilton LLP is a multi-practice law firm with more than 500 lawyers nationally. The firm provides corporate, litigation and regulatory legal services to leading businesses, governmental entities, nonprofit organizations and individuals throughout the nation and the world.

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