Joint Venture (JV) structuring is one of the most complex and strategically important processes in corporate law. In Georgia, where foreign investment often requires collaboration with a local partner (whether for land ownership, local market knowledge, or licenses), creating the right legal framework for a JV is critical. This is not just about registering a new LLC; it involves combining the interests, resources, and risks of two or more independent parties to achieve a common goal. Improperly structured joint ventures often fail due to "deadlock situations," ambiguity in management rights, and disagreements over profit distribution. Experts represented on the Legal.ge platform help you create a JV structure that ensures a balance between parties, protects minority partner rights, and clearly defines exit strategies.
What Does JV Structuring Service Cover?
Our lawyers offer a comprehensive approach to JV formation, which includes:
- Choosing Legal Form: Deciding whether to create a new legal entity (Corporate JV - typically an LLC or JSC) or regulate the relationship contractually (Contractual JV), considering the "Law on Entrepreneurs."
- Drafting Shareholders' Agreement (SHA): A document detailing the staffing of management bodies, veto rights, dividend policy, and additional funding obligations.
- Valuation and Registration of Contributions: Establishing mechanisms for valuing monetary and non-monetary (land, IP, technology) contributions and rules for reflecting them in capital.
- Deadlock Resolution Mechanisms: Pre-defined scenarios (e.g., Russian Roulette, Texas Shootout) to ensure partner disagreements do not halt the business.
- Exit Strategies: Rights to sell shares, including Right of First Refusal, Tag-along, and Drag-along rights.
Real-World Scenarios When You Need This Service
JV structuring is essential for the following types of projects:
- Real Estate Development: When one party owns the land and the other (developer) provides construction financing and management. Precise allocation of built areas is required.
- Energy Projects: Construction of HPPs or wind farms, often combining a foreign investor and a local company holding the licenses.
- Technology Transfer: When a foreign company brings technology, and a local partner provides distribution networks and marketing.
- Tender Participation: Creating a consortium to participate in state procurement, where parties combine experience and financial metrics.
Georgian Legal Framework and Regulations
Joint venture activities are regulated by the Law of Georgia on Entrepreneurs, which defines corporate governance standards, and the Civil Code of Georgia, which regulates contractual relationships (e.g., partnership agreements). It is also important to consider the Law on Competition, as combining large companies or creating a JV may require consent from the Competition Agency (notification of concentration). Additionally, if a JV is created based on the privatization of state property, the Law on State Property is relevant. A professional lawyer ensures the structure complies with all these regulations.
Service Process
The JV structuring process on Legal.ge involves:
- Goal Analysis: Clarifying the commercial interests and roles of the parties.
- Structure Design: Selecting the optimal legal form and tax regime.
- Drafting Documentation: Preparing the Shareholders' Agreement, Charter, and ancillary contracts (e.g., management services).
- Negotiations: Agreeing on terms between parties and providing legal support.
- Registration: Registering the Joint Venture in the Public Registry.
Why Choose Legal.ge?
A Joint Venture is like a "corporate marriage," where pre-defined rules determine the longevity and success of the relationship. Specialists on Legal.ge have years of experience structuring complex JVs. We do not use a template approach; we create individual mechanisms that protect your investment and minimize the risk of conflict.
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