Joint venture agreements – governance, deadlock, IP and exit in a JV
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Short answer: A joint venture can be structured as a purely contractual collaboration or through a joint entity. Regardless of the form, the parties need to regulate objectives, financing, governance, decision-making rules, intellectual property, competition issues, confidentiality, deadlock, exit, and what happens if a party fails to deliver according to plan.
| Contractual joint venture | The parties collaborate through an agreement without necessarily forming a joint entity. |
| Equity joint venture | The parties own a joint company that operates the business. |
| Key issue | The structure affects liability, governance, financing, tax, and exit. |
| Competition law | Collaboration between companies must be assessed to ensure the agreement does not unlawfully restrict competition. |
Start with purpose and scope
A good joint venture agreement begins by defining what the collaboration is intended to achieve. Which products, markets, customers, or projects are covered? What is explicitly excluded? A clear scope reduces the risk of conflict over resources, customer relationships, and competing business activities.
Governance and reserved matters
The parties should specify how the board or steering committee is appointed, what voting rights each party holds, and which decisions require unanimity or a qualified majority. So-called reserved matters may include, for example, budgets, major investments, loans, new share issues, key recruitments, transactions with related parties, and changes to the business plan.
Deadlock – when the owners cannot agree
A 50/50 collaboration needs a well-considered deadlock mechanism. Options include escalation to the owners' management, mediation, time-limited renegotiations, or mechanisms for buying and selling shares. The choice should suit the relationship and the value of the business.
Capital, resources, and performance requirements
- initial financing and future capital requirements,
- who contributes personnel, technology, customer channels, or licenses,
- budget process and cost allocation,
- what happens if a party fails to fund its share,
- how profits may be distributed or reinvested.
IP: background and foreground
Distinguish between intellectual property that the parties bring into the collaboration and what is developed within the joint venture. The agreement should determine ownership, licenses, rights of use after exit, and the management of improvements.
Competition law and information exchange
If the parties are competitors or potential competitors, information exchange and joint market decisions may need to be limited. Competition law prohibits agreements that noticeably prevent, restrict, or distort competition.
Joint Venture Agreement 2026/2027 – Swedish and English
The template package contains structured clauses for governance, financing, IP, deadlock, exit, competition law, and confidentiality.
FAQ
Must a joint venture have its own limited company?
No. A joint venture can be contractual. However, a joint company may be appropriate when the business needs its own organization, financing, and assets.
What are reserved matters?
These are particularly important decisions that the parties decide should require a higher decision-making level or a specific majority.
Is a separate shareholders' agreement needed?
In an equity joint venture, the JV regulation is often combined with shareholder matters. The document structure should be adapted to the chosen corporate and ownership structure.
The article provides general information and does not replace individual legal advice. Regulations, collective agreements, industry terms, and circumstances in the individual case may affect the assessment.
