Joint Venture Concrete Actions

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Joint Venture Concrete Actions by Mind Map: Joint Venture Concrete Actions

1. will the parties be prohibited competing with the JV ? Territorial or other limitations ?

2. type of JV

2.1. CJV [contractual joint venture] e.g. signing contract that smaller company may use distribution channel of the bigger company

2.2. PJV [Partnership Joint Venture] rights and obligations in partnership agreement. Common for RealEstate, but not for business with R&D and Production

2.3. EJV [Equity Joint Venture] Start new company with agreed on business. Flexible, shares and BOD seats shared

3. ethical business practice

3.1. gifts

3.2. corruption

3.3. Foreign Corrupt Practices Act [US Government] this is a law prohibiting corruption for companies listed in the US

3.4. security

3.4.1. standard of factories

3.4.2. safety equipment

3.4.3. waste of money according to JV partner

3.4.4. chemicals used in production

3.5. environment

3.6. stick to the more restrictive rules better international standards

3.7. beware of the shitstorm

4. what to offer in order to attract JV partner

4.1. seat in the home board of directors ?

4.2. kickbacks ? What is it ?

5. Communication

5.1. Agree on expectations

5.1.1. Investment

5.1.2. expected returns

5.2. SO knowing BOTH markets has to be head of JV

5.3. procedure for information flow from JV to parties

6. To define

6.1. Nature of JV activities

6.2. specific project or long - term purpose

6.3. objectives of each party

6.3.1. market access

6.3.2. capacity increase

6.3.3. capital access

6.3.4. risk sharing

6.3.5. resource access, staff, technology

6.3.6. revenue & profit expansion

6.4. ensure shared vision

7. legal

7.1. regulatory consents

7.2. licenses required

7.2.1. for formation of JV

7.2.2. for business to run

7.3. arrangements between JV and a partner

7.3.1. legal liability for losses ? Partner ?

7.4. insurance

7.4.1. insurance policies required by law

7.4.2. further commercial insurance necessary

8. finance

8.1. what security to provide if bank loan funding ?

8.2. means of initial investment

8.3. continuing arrangement to agree on

8.3.1. working capital requirement

8.3.2. loss incurred by JV

8.3.3. how to share dev/expansion costs

8.4. what if a party defaults

8.5. agree on how raising further equity will influence the venture partner share holdings

8.6. how to fund initial costs

8.7. how will contribution of assets/premises/staff be weighted ? Allotment of shares ? Will it be payed for ?

9. business

9.1. conflict between JV business and that of the parties ?

9.2. Business plan is a must

10. organization/control

10.1. board of directors

10.1.1. rights for appointing

10.1.2. what quorum

10.1.3. matters to be decided by board/shareholders

10.2. party consent requiring decisions in BOD

10.3. who will be lending bankers

10.4. who will be JV auditors

10.5. dividend policy - how much, when, who to decide on dividend

10.6. HOW TO deal with disputes/deadlocks ?

11. shares

11.1. is transfer of shares possible

11.1.1. if so - pre-emption rights ?

11.2. how will shareholders decide different types of shares needed ?

11.3. funding proportions

11.3.1. ME

11.3.2. PARTNER

11.3.3. PUBLIC/EXTERNAL

12. tear down

12.1. what happens to arrangements between JV and shareholder ?

12.1.1. Loans

12.1.2. IP

12.1.3. Assets

12.2. fixed term or indefinite in duration

12.3. automatic termination?

12.3.1. by loss of regulatory approval

12.3.2. by loss of particular asset

12.3.3. insolvency of any party

12.3.4. transfer of any party´s shares

12.4. conditions for 1-sided termination

12.4.1. breach of agreement by 1 party

12.4.2. notice of termination

12.5. termination arrangements

12.5.1. assets

12.5.2. IP

12.5.3. outstanding JV contracts

12.6. "To ensure the joint ventures will be successful, the most careful planning should focus on how to end them"

13. R&D

13.1. IP

13.1.1. license

13.1.2. transfer

13.1.3. who will own IP created by JV

14. HR

14.1. needed ?

14.2. where to get

14.3. seconded by JV parties ?

15. Operations

15.1. who will - if applicable provide training

16. Legal form

16.1. Tax considerations for Partners for JV itself

17. DOCS/AGREEMENTS required

17.1. Scope/Purpose of JV

17.2. How to manage JV

17.3. Division of Power & influence on JV mgmt

17.4. Capitalization&Financing of JV

17.5. Share transfer to 3rd party

17.6. Termination circumstances

17.7. opt

17.7.1. Management agreement

17.7.2. S&D agreement

17.7.3. supply agreements

17.7.4. service and secondment agreements

17.7.5. loan note instruments

18. PARTNERSEARCH

18.1. know your potential partner

18.2. Sources

18.2.1. traditional research: recent publications of business magazines & business related articles

18.2.2. Online publications and company profiles

18.2.3. business organization membership meetings to stay up to date w.r.t. current developments

18.2.4. Phone Book ?

18.2.5. Networking - talk about your JV desire

18.3. criteria

18.3.1. similar ethics

18.3.2. financials

18.4. JV BUSINESS DECISION TREE

19. QUOTES

19.1. According to Deloitte&Touche research, over 50% of JV survive less than 4 years due to poor planning

20. FAILURE FACTORS

20.1. overestimation

20.2. undetected business environment changes

20.3. poor partner-company integration

20.4. weak leadership structures

20.5. inadequate due dilligence

20.5.1. poor partner screening

21. JV Planning process

21.1. 1. CONCEPT

21.2. 2. ANALYTICS

21.3. 3. DEVELOPMENT

21.4. 4. PRE-OPERATION

22. JV Agreement

22.1. business objectivs

22.2. obligations

22.3. sponsorship percentages

22.4. insurance coverage

22.5. fund&equity contributions

22.6. personnel

22.7. procedures

22.8. purchases

22.9. management authority/controls

22.10. dispute resolution methods

22.11. profit recognition & distribution

22.12. assignment of rights

22.13. pricing intents

23. RISK and Mitigation

23.1. Waste of time

23.2. Loss of money

23.3. Loss of IP

23.4. No significant outcome