Joint Venture Agreement Singapore
One of the challenges that often arises for joint venture companies with two or more shareholders is the flexibility to make agile decisions, especially in rapidly changing situations. In the current emergency, many businesses need to make important decisions at high speed regarding their cost base or financing needs. While governance protection imposes minimum termination times for meetings (and the frequency and authorized location and location of such meetings), parties may need additional flexibility. In the case of existing joint ventures, some of the current requirements may need to be relaxed, although caution is required, particularly where tax reasons dictate the location and physical presence of directors at board meetings4. These rules are being amended to allow for a similar review of mergers or joint ventures involving other technology sectors, including artificial intelligence, cryptographic authentication technology and advanced materials. It is therefore important for investors to understand the importance of a well-developed joint venture agreement. The issue of joint venture financing is always an important area for detailed review. With respect to existing joint ventures, the financial constraints of the current environment underscore the importance of being able to quickly identify and exit funding sources. Therefore, the importance of the parties` commitment (and capacity) to provide additional funds in the event of an emergency will be a critical priority. This may be a particular challenge for joint ventures that are trying to obtain UK resident status but have a multinational shareholder base, including non-British directors.
Singapore`s Competition Act 2004 prohibits anti-competitive agreements, abuse of dominance and mergers that significantly reduce competition in any Singapore market. The creation of a joint venture, intended to fulfil all the functions of a self-sustaining economic entity, will be considered a “merger” in which joint control between shareholders will identify a number of potential cash failures in most joint venture agreements. In the case of such an event, structural corrective action may be required. This may include the right to repurchase the defaulting shareholder or, in certain circumstances (most often in cases where there are two or a small number of shareholders), to require the defaulting party to buy back its co-shareholders. Assuming that the shares held by the shareholders do not have preferential rights over dividends, it would be customary to define the policy of the joint venture with respect to the date and quantity of dividends paid. This must be conditional on compliance with external financing agreements and, under current market conditions, it may be necessary to identify the company`s likely inability to pay returns over a longer period of time. While the benefits of joint ventures may be evident in terms of improving the strength of banks and market banks, joint ventures also require a high degree of cooperation and cooperation in a competitive environment of business requirements and priorities. In the absence of good planning and specialized advice, these competing characteristics can be particularly stressed in these difficult and uncertain times. The creation and creation of a new joint venture or business combination requires specific skills that assess not only the legal and tax environment, but also the rules of the capital market in the local environment. Depending on the underlying rationale of the joint venture, the expected operating autonomy and the capabilities of the joint venture partners, assets or services of the joint venture may be made available to one or more shareholders.