Joint Venture Agreement In South Africa

What are The Deadlock provisions that are usually included in joint enterprise agreements in your jurisdiction? Are there specific requirements or restrictions on joint ventures in your jurisdiction that could discourage international investors? It depends on the type of joint venture vehicle. If the joint venture vehicle is a business, the South African Companies Act requires disclosure of certain stock transactions. These advertising obligations apply only to companies that, under the Corporate Act, are considered regulated companies. Public companies are regulated companies, but private companies may also be regulated companies if more than 10 per cent of the issued shares were transferred in the 24 months prior to a transaction. Beyond what is expressly agreed in the joint enterprise agreement, how can the parties to the joint venture have debts to each other? A joint venture operating in South Africa is not limited to the regulatory law provided for by its joint venture agreement. Similarly, the method of dispute resolution chosen by a party is not limited. The Party should ensure that it chooses dispute resolution mechanisms that are appropriate for different types of disputes. For example, a deadlock dispute may be better resolved by the establishment of experts (where such a mechanism is recognized under the chosen existing legislation) than by litigation. Joint ventures are widespread in South African trade in all sectors.

This means that there is a developed legal and commercial entity with respect to joint ventures. It depends on the nature of the joint venture. The position under the current South African Companies Act is different from that which has always prevailed in South Africa. Previously, it was possible for the shareholders of a joint venture to enter into a shareholder contract and to provide that the shareholders` pact prevailed in the event of a conflict between the shareholders` pact and the company`s statutes. Under the current South African Companies Act, that is no longer possible. The South African Companies Act provides that a shareholders` pact must be consistent with the “Companies Act” and the incorporation of the company (of its statutes), and any provision of such a shareholders` pact inconsistent with the company`s law or constitution memorandum is null and void in terms of inconsistency. As a result, the parties to the joint venture have added more provisions to the foundation agreement to eliminate any inconsistencies and the risk of such a provision being nullified. If the joint venture is a partnership, the partners are jointly responsible for the company`s debts. If a partner pays more than his interest in the corporation, he may be entitled to the balance of the claim under the common law against the other partner. How can the parties to the joint venture interact with the joint venture? Are there any restrictions? Deadlock`s rules depend on the extent of the interests of the joint venture partners. If their interests in participation are the same, it is customary for a stalemate to lead to the liquidation of the company. This is sometimes preceded by a kind of mediation, usually a referral to high-ranking members of the board of directors of the parties to the joint venture (for example.

B of the president). Depends on the circumstances. Very often, intellectual property rights are held by the parties to the joint venture and are granted to the joint venture. Sometimes a separate IP entity containing the IP is created and that entity authorizes the IP to the joint venture. The rights of the joint venture itself are generally transferred to the joint venture and would be treated in the same way as other assets at the time of termination. Are there any legal or regulatory restrictions on the inflow of capital into the joint venture, the distribution of profits or the withdrawal of cash by other means of the joint venture? The most common factors that fuel the structure of a joint venture are preferential tax treatment by the parties (see question 19), competition problems (see question 13) and accounting (e.g. B the consolidation of the joint venture in their financial statements).