JOINT VENTURES

Mamo TCV Advocates have advised various clients intending to create joint ventures. The Firm’s services range from offering advice on the most suitable type of joint venture to set-up to the drafting of joint venture agreements and preparation of all the documentation together with all the legal work which may be required for the establishment of corporate joint ventures. The firm is also able to handle all legal issues which may arise in relation to joint ventures, including competition law implications. 

 

Legal Background 

 

A joint venture includes any arrangement by which two or more existing undertakings agree to co-operate and (usually) combine their resources with a view to a profit. This project will often be a new enterprise but the collaboration may also be aimed at the more efficient operation of an existing activity. Perhaps the simplest form of joint venture is where the parties decide to retain their own independence and base their co-operation entirely upon contract. Alternatively, the parties may decide to combine on a more permanent basis, for example by forming a partnership or creating a corporate joint venture 

 

Since the creation of a joint venture entails cooperation between two or more undertakings, competition law implications may arise. Indeed, joint ventures should not breach the provisions of Articles 5 and 9 of the Competition Act (Chapter 379 of the Laws of Malta) which are equivalent to Articles 81 and 82 of the EC Treaty. The creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity, known as a "full-function joint venture", would however also constitute a “concentration” and would also be regulated by the Control of Concentrations Regulations, issued under the above-mentioned Competition Act. The latter class of joint ventures would have to be notified to the Director of the Office for Fair Competition for a decision.