Termination—corporate joint ventures
Termination—corporate joint ventures

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • Termination—corporate joint ventures
  • Provision for termination
  • Common termination events
  • Termination procedures
  • Termination by agreement (exit)
  • Voluntary sale of shares
  • Specific termination events
  • Deadlock
  • Additional issues for premium listed companies to consider

The law as set out in this Practice Note may be affected by Brexit. For further details of its impact, see Practice Note: Brexit—impact on corporate joint ventures.

Provision for termination

When entering into a joint venture (JV), some parties may already have views as to the circumstances leading to, and the timing of, termination. For example, some parties may enter into a JV in order to carry out a specific project and therefore the JV should terminate once the project has been completed. Others may agree that the JV will have a fixed term, following which the JV will come to an end. Alternatively, the express intention of the parties may be to realise their investment in the joint venture within a specified period of time, either by selling the whole joint venture company (JVC) to a third party or by floating the JVC on a stock exchange.

However, even where the parties have no explicit intentions at the outset as to the circumstances and timing for termination of the JV, consideration should be given to the events which could lead to termination of the JV and the joint venture agreement (JVA) should set out procedures for termination of the JV if such events occur.

Common termination events

Common termination events include:

  1. agreement of the parties to terminate

  2. the