Shareholders Agreement Joint Venture for Philippines

Shareholders Agreement Joint Venture Template for Philippines

A comprehensive legal agreement governed by Philippine law that establishes the terms and conditions between shareholders in a joint venture company. This document outlines the rights, obligations, and relationships between the joint venture partners, including corporate governance structures, capital contributions, profit sharing, and decision-making processes. It ensures compliance with Philippine corporate laws, including the Revised Corporation Code and Foreign Investments Act, while addressing specific requirements for foreign ownership limitations and local business practices. The agreement serves as the primary governing document for the joint venture's operation and management.

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What is a Shareholders Agreement Joint Venture?

The Shareholders Agreement Joint Venture is a crucial document used when two or more parties decide to establish a joint business venture in the Philippines. It is particularly important in cross-border transactions where foreign investors partner with local Philippine entities. The agreement must comply with Philippine corporate law, including the Revised Corporation Code, Foreign Investments Act, and other relevant regulations that may restrict foreign ownership in certain sectors. This document typically includes detailed provisions on shareholding structure, management control, profit distribution, transfer restrictions, and exit mechanisms. It serves as the foundational document governing the relationship between shareholders and the operation of the joint venture company, while addressing specific requirements of Philippine corporate governance and foreign investment regulations.

What sections should be included in a Shareholders Agreement Joint Venture?

1. Parties: Identification of all shareholders and the joint venture company, including their complete legal names, addresses, and registration details

2. Background: Context of the joint venture formation, business objectives, and relationship between the parties

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and rules of interpretation

4. Formation and Business of the Company: Details of company formation, business scope, and objectives of the joint venture

5. Capital Structure and Funding: Share capital structure, initial contributions, and future funding obligations

6. Issuance of Shares: Procedures for share issuance, payment terms, and share certificates

7. Corporate Governance: Board composition, appointment rights, voting requirements, and management structure

8. Shareholders' Rights and Obligations: Voting rights, dividend rights, and general obligations of shareholders

9. Transfer of Shares: Restrictions on transfer, right of first refusal, tag-along and drag-along rights

10. Reserved Matters: List of decisions requiring special majority or unanimous consent

11. Financial Matters and Distributions: Financial reporting, audit rights, dividend policy, and distribution rules

12. Deadlock Resolution: Procedures for resolving fundamental disagreements between shareholders

13. Term and Termination: Duration of the agreement and circumstances for termination

14. Exit Provisions: Mechanisms for shareholders to exit the joint venture

15. Confidentiality: Protection of confidential information and trade secrets

16. Non-Competition and Non-Solicitation: Restrictions on competitive activities and employee solicitation

17. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law

18. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

What sections are optional to include in a Shareholders Agreement Joint Venture?

1. Intellectual Property Rights: Detailed provisions for IP ownership and licensing when the JV involves significant IP assets

2. Employee Matters: Specific provisions regarding key employees and management when the JV involves significant personnel transfers or specific management arrangements

3. Technical Services: Terms for technical support or services provided by shareholders when the JV involves technical collaboration

4. Local Content Requirements: Specific provisions addressing Philippine local content requirements for regulated industries

5. Foreign Exchange: Provisions dealing with foreign exchange risks and conversions when involving foreign shareholders

6. Related Party Transactions: Framework for handling transactions between the JV and its shareholders when significant ongoing business relationships are anticipated

7. Environmental Compliance: Specific environmental obligations and compliance requirements for environmentally sensitive industries

8. Anti-Corruption Compliance: Detailed anti-corruption provisions when dealing with government contracts or regulated industries

What schedules should be included in a Shareholders Agreement Joint Venture?

1. Schedule 1 - Initial Shareholding Structure: Detailed breakdown of initial shareholding percentages and share classes

2. Schedule 2 - Business Plan: Initial business plan and financial projections

3. Schedule 3 - Articles of Incorporation: Copy of the company's Articles of Incorporation

4. Schedule 4 - By-Laws: Copy of the company's By-Laws

5. Schedule 5 - Reserved Matters List: Detailed list of matters requiring special approval

6. Schedule 6 - Initial Directors: List of initial directors and their details

7. Schedule 7 - Initial Capital Contributions: Details of initial capital contributions including timing and form

8. Schedule 8 - Key Performance Indicators: Agreed performance metrics and targets

9. Schedule 9 - Deed of Adherence: Form of deed for new shareholders joining the agreement

10. Schedule 10 - Valuation Methodology: Agreed methods for valuing shares in various circumstances

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Technology

Real Estate Development

Renewable Energy

Infrastructure

Retail and Consumer Goods

Financial Services

Agriculture and Food Processing

Healthcare and Pharmaceuticals

Tourism and Hospitality

Business Process Outsourcing

Mining and Natural Resources

Construction

Telecommunications

Relevant Teams

Legal

Corporate Governance

Executive Leadership

Finance

Compliance

Business Development

Corporate Development

Risk Management

Investment

Shareholder Relations

Board of Directors

Strategic Planning

International Operations

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Corporate Secretary

Managing Director

Board Director

Head of Legal

Chief Operating Officer

Investment Director

Corporate Development Manager

Compliance Officer

Business Development Director

Chief Risk Officer

Joint Venture Manager

Shareholder Relations Manager

Industries
Revised Corporation Code of the Philippines (Republic Act No. 11232): The primary law governing the establishment, operation, and regulation of corporations in the Philippines. It provides the basic framework for corporate governance, shareholders' rights, and corporate operations.
Foreign Investments Act of 1991 (Republic Act No. 7042): Regulates foreign investment in Philippine corporations, including restrictions on foreign ownership in certain industries and the requirements for foreign participation in local businesses.
Securities Regulation Code (Republic Act No. 8799): Governs securities, shareholder rights, and protection of minority shareholders. Important for provisions relating to share transfers and securities regulations.
Philippine Competition Act (Republic Act No. 10667): Protects competitive market conditions and regulates anti-competitive behavior. Relevant for joint venture arrangements and market competition provisions.
National Internal Revenue Code: Governs taxation aspects of corporate transactions, including share transfers, dividends, and corporate income tax obligations.
Anti-Dummy Law (Commonwealth Act No. 108): Prohibits circumvention of foreign ownership restrictions through dummy arrangements or proxy holdings.
Civil Code of the Philippines: Provides general principles of contract law and obligations that apply to shareholder agreements and business relationships.
Labor Code of the Philippines: Relevant for provisions relating to employment matters in the joint venture, particularly if the agreement includes management positions or employee-related provisions.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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