Shareholders agreement for a joint venture company

A joint venture company is owned by businesses that compete, cooperate or supply each other outside it, and the agreement has to define what the venture is for, what each parent puts in, how decisions are taken when the parents disagree, who pays when more money is needed, who owns what the venture creates, and how the parents get out, with the venture wound up or one buying the other out. I draft that agreement for the parties together, with a briefing session and a note on how it fits the articles, for a fixed fee of £995, delivered in five working days.

Who this is for

Businesses in England and Wales setting up a joint venture company with another business for a project, a market, a product or a service, from two trades sharing a contract to two companies combining a product and a sales channel.

What matters in a joint venture shareholders' agreement

What each party contributes and what the company does

The agreement should define the venture's business and its limits, what each parent contributes (cash, assets, IP, staff, customer relationships, a contract) and at what value, the shareholdings that result, and the business plan and budget the venture starts with; a venture whose purpose is not defined becomes a competitor of one parent or a cost centre of the other, and the definition is what the reserved matters and the non-compete are measured against.

The board, reserved matters and deadlock between corporate parents

Each parent appoints directors in proportion or equally, the agreement sets the quorum (usually a director from each parent), the chair and whether there is a casting vote, the reserved matters needing both parents (the budget and business plan, borrowing, capital expenditure above a limit, contracts outside the plan, changing the business, issuing shares, a sale, winding up), and a deadlock mechanism (escalation to the parents' chief executives, mediation, then a buy-out or winding up); the directors owe duties to the venture company under the Companies Act 2006 and not to the parent that appointed them, and the agreement should say how conflicts under section 175 are managed.

Funding, further capital and the parent that will not pay

The agreement should state the initial funding, whether by shares or shareholder loans, the parents' obligations to provide further funding (a committed amount, or none beyond the initial), the consequences where a parent does not contribute its share of an agreed call (dilution at a stated discount, a loan from the other parent at a stated rate, or a default triggering a buy-out), and the treatment of guarantees the parents give for the venture's borrowing; a venture that needs money neither parent has agreed to provide stops.

Intellectual property contributed and created

Each parent licenses the IP it contributes to the venture for the venture's purpose, retaining ownership, with the licence ending if the venture ends or the parent exits as the agreement provides; IP the venture creates belongs to the venture, with the agreement saying what happens to it on termination (it goes to one parent at a price, both parents receive a licence, or it is sold with the venture), and the contributing parents' confidential information is protected with the venture's staff bound; a venture whose IP position is unclear cannot be sold, split or wound up cleanly.

Non-compete, confidentiality and the parents' own businesses

The agreement should say whether the parents may compete with the venture during its life and for a period after exit, within limits the Competition Act 1998 allows between the parents (restrictions ancillary to the venture and no wider than it needs), should allocate opportunities in the venture's field to the venture, should impose confidentiality on each parent for the other's information and the venture's, and should say how the parents deal with the venture as customers or suppliers (on arm's length terms approved as reserved matters); the parents' directors sit on both sides, and the agreement should say what they may take back to their own companies.

Exit, termination and unwinding the venture

The agreement should set the venture's term or the events that end it (completion of the project, a parent's change of control, insolvency, breach, deadlock), the exit routes (one parent buying the other out at a valuation or under a put and call option, a sale to a third party with drag-along and tag-along, or a solvent winding up with assets distributed as the agreement provides), the parents' obligations on unwinding (staff, contracts, customers, the IP), and the survival of confidentiality and non-compete; the note on the articles addresses the transfer provisions and the share rights under section 33 of the Companies Act 2006.

What it costs

Shareholders agreement, £995. An agreement between the shareholders of a private company, with a note on how it interacts with your articles. Five working days.

Buying online forms the engagement on payment. The scope is what the shareholders agreement page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A briefing session with all shareholders together, to work through the questions people avoid asking each other
• A shareholders agreement drafted for your actual situation rather than a precedent with the names changed
• A note on how the agreement interacts with your articles, and whether the articles need amending to make it work
• A plain English explanation of every material choice, so nobody signs something they have not understood
• One round of amendments
• Signature-ready documents

What is not included

• Acting for individual shareholders separately, because I act for you jointly
• Company valuation
• Tax structuring, which needs your accountant and should run alongside this
• Amended articles of association and IP assignments, which I quote separately
• Filing at Companies House
• Resolving a dispute that has already started

Questions I am often asked

Our joint venture partner's director keeps reporting to his own company. Is that allowed?

A director of the venture owes duties to the venture, not to the parent that appointed him, and the agreement says what venture information parents may receive and how conflicts are managed. Routine reporting of the venture's position to a parent is usually permitted; acting for the parent against the venture is not.

What happens if our partner will not fund its share of a capital call?

What the agreement says: dilution at a stated discount, a loan from the paying parent, or a default that lets the paying parent buy the other out. Without the clause, the venture stops.

Who owns what the joint venture develops?

The venture, under the agreement, with the parents' contributed IP licensed to it. On termination the agreement decides whether one parent takes the venture's IP, both are licensed, or it is sold.

Related guidance and services

• Shareholders agreement, £995, the service this page describes
• Contract review, £495
• Employment contracts and handbooks, £595
• Reviewing a joint venture agreement
• Shareholders agreement with deadlock provisions

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.