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Alex J.
Alex J., Solicitor
Category: Property Law
Satisfied Customers: 3666
Experience:  Two years conveyancing experience.
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My company (a uk limited company) has a joint venture agreement

Customer Question

My company (a uk limited company) has a joint venture agreement with another company (another UK limited company). We have already filed a claim against the JV partner, still early stages awaiting case management conference/directions. I wish to assign the JV agreemnent claimm/court case) to another of my companies to continue the action. Is this possible and and what is the procedure and what do i need to do?
Submitted: 3 years ago.
Category: Property Law
Expert:  Alex J. replied 3 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Do you have a commercial reason for the assignment?

The assignment would require a deed. If the Joint Venture does not specifically give your company power to assign its rights and obligations, your company would need the permission of the other partner.

The other point to consider if you want to assign the rights and obligations to the other company (including the right to carry on the court proceedings), you would need a what is know as a Deed of Novation. The difference is an assignment only assigns the benefit of the agreement, what you actually want your company to do is "Step into the Shoes" of your other company - this cant be done by assignment the technical word is a novation - this is because an assignment can assign a benefit but not an obligation.

I look forward to hearing from you.

Kind regards

AJ
Expert:  Alex J. replied 3 years ago.
Hi,

Can I be of any further assistance?

Kind regards

AJ
Customer: replied 3 years ago.

Alex thank you for this. The Joint Venture agreement does not specifically give my company (the only other party to the JV) the right /power to assign/novate but nor is there any restrcition or limitation so I believe it can assigned /novate rights and obligations. It would not need and most likely not get permission of the other partner (another uk limited company) to assign/novate its rights and obligation (bearing in mind the other party is the one the action is against) .

The other point to consider if you want to assign the rights and obligations to the other company (including the right to carry on the court proceedings), you would need a what is know as a Deed of Novation.


 


Do you have a standard deed/can you draft me a copy? I can email you the JV wording if required - pretty basic and short.


 


Regards


 


Jospeh

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

Unfortunately we cannot do any drafting on the site but if you look at Simply Docs they will have a draft novation deed - www.simply-docs.co.uk/‎

Had it ever been contemplated by the parties that you should have a right of assignment?

Kind regards

AJ
Customer: replied 3 years ago.

No Alex, it never figured and nor was it ever envisaged. As it was not specifically excluded my undertanding is that there is no restriction on assignment. Hope this is correct and i will go to simply Docs



regards



Joseph

Expert:  Alex J. replied 3 years ago.
Hi

Thank you.

If the contract is silent then you can assign the benefit of the contract without consent.

However you will not be able to relieve yourself of the burdens of the contract without the consent of the other party.

Kind regards

AJ
Customer: replied 3 years ago.

Thank you Alex. My company (the JV partner) will be sold (holds properties and eventually liquidated once the properties it holds are sold. We discharged all our obligations under the JV so do not have burdens as such however the the company that takes ove rthe assigment will all benefits and burdens (if any) of the contract. Is it still Novation rather than assignment.


 


regards


 


Joseph

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

You could just assign the benefit of the contract but then the old co would still be on the hook for any liability. A novation literally means that your new co steps into the shoes of the old co - "warts and all"!!.

I understand what you are trying to achieve, this is a tax efficient way of distributing the funds/profit. The company partner gets money from the property sale, holds it for two years and then is subjected to a solvent liquidation and the funds and assets are distributed to the shareholders "in specie". You have obviously taken specialist advice so I would only suggest you check with your accountant whether an assignment alone is sufficient.

Kind regards

AJ

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