Mining Partnership Agreement

The registered joint venture is attractive from a liability point of view, since liability should be limited to the joint venture company rather than the shareholders. The form of enterprise may also be attractive if the interests of the company`s partners are not expected to be fully coordinated, as company rules will generally facilitate confrontation between shareholders (although in some cases the protection of corporate rights may erode this situation). In 2018, the mining joint venture (JV) in the sector has been clearly demonstrated, as mining companies spend more on exploration and seek strategic partners to invest in expanding projects. While the jurisdiction in which the joint venture will be headquartered is the main driver of determining the type of business structure available to potential partners in the joint venture, some legal systems, such as Canada, offer several attractive opportunities. A non-corporatized joint venture is the simplest, fastest and generally cheapest form of the joint venture structure; it is a creation of a contract in which the joint enterprise agreement regulates all aspects of the project and the relations between the partners of the joint venture. The ownership structure is based on the common economic interests of each partner of the joint venture in the assets of the joint venture (with a legal title, either by a partner of the joint venture or by a legal company owned between them). This means in practice that where one aspect of the business relationship is not set out in the joint enterprise agreement, the parties cannot rely on corporate or common law to fill a gap and a dispute is more likely. On the other hand, the free nature of the unincorporated joint venture may also be an advantage, since the parties have the greatest contractual freedom to define their relationship and the operation of the joint venture. The registered business form requires the creation of a separate company, which will be the main vehicle of the joint venture, which probably owns all the project resources and which can operate the project on a daily basis (with the help of a management team made up of MPs from one or more participants in the joint venture). Each partner of the joint venture is a shareholder in the joint venture company and the joint enterprise agreement must respect the provisions of the company`s statutes in the jurisdiction in which the joint venture company is registered. A limited partnership consists of a compleoder and at least one sponsor. As long as the sponsors do not participate in the active management of the limited partnership, their liability is limited to their paid-up capital (while the company becomes indefinite). In practice, the kompleoder will often be a company and sponsors the exclusive shareholders of Kompleiten, who appoint the companion`s board of directors.

From a tax point of view, the essential advantage of the form of the company is that it is treated fiscally as a transit unit and that profits and losses are paid to the partners.

Posted Saturday, December 12th, 2020 at 7:22 pm
Filed Under Category: Uncategorized
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