Unincorporated Joint Venture Agreement Malaysia

The parties should consider appointing an agent to execute the parts of a joint venture prior to interim due diligence in order to avoid the possibility of future setbacks. This essentially minimises future risks and promotes transparency between all parts of the joint venture. A joint venture agreement is a final agreement on which the joint venture between the parties to the proposed joint venture is based. A Joint Undertaking Agreement should set out the contributions, expectations, obligations, rights and obligations and responsibilities of all relevant parties to the proposed Joint Undertaking. In addition, the joint venture contract must be fully developed and specify the obligations of all parties concerned. A key element of joint venture agreements is the mechanism that determines the allocation of profits and liabilities among the parties to the joint venture. The agreement should also be structured in such a way as to take into account the intentions of the parties to minimise the risk of disputes arising out of or related to the joint venture agreement. VJs may or may not be registered by law. A registered JV is a company that brings together two companies and forms a new JV company.

For example, A Sdn Bhd works with B Sdn Bhd to create AB-JV Sdn Bhd. AB-JV Sdn Bhd becomes a separate legal entity in the law, and one would bring an action against AB-JV Sdn Bhd in the same way that one can bring an action against any other sdn claim. In most cases, the profit-bearing agreement between the parties to a non-legally viable joint venture shall be structured on the basis of the contributions of their respective partners to the joint venture. Similarly, each partner is responsible for debt and liabilities on the basis of its share of contributions. A tempting advantage for an unregistered joint venture is that the unregistered joint venture may be a short-term agreement between the parties, unlike a registered joint venture, which is usually structured in the longer term between the parties to achieve the objectives of the registered joint venture. Despite the profit potential of joint ventures, parties should always be cautious when reviewing and thorough in preparing for a joint venture. It is often extremely advantageous for parties to obtain legal advice at an early stage of the negotiation process, as even the choice between different types of joint ventures and the suitability of each type of joint venture for their business objectives and intentions can mean the difference between success and failure. . . .

Comments are closed.