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JGM, Solicitor
Category: Law
Satisfied Customers: 13188
Experience:  30 years as a practising solicitor.
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What would be the best structure for a single project

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What would be the best structure for a single project property joint venture where you have 3 investors contributing funds and the 4th JV party (a Limited Company) acting as development manager, running the project, owning the property during the project and making the sales or residential units at the end. Each party to be responsible for their own tax. The venture to end at the end of the project with all profits distributed? Thanks.

Thanks for your question. A newco is certainly one way of doing this but would it not be simpler just to have a joint venture agreement between existing parties rather than setting up another entity? Happy to discuss.

Customer: replied 8 months ago.
That's what I was wondering. If we just have a JV agreement, can we appoint the development manager to run the development through their company, specify roles, contributions and returns of each party, specify that a charge over the property be put in place in favour of the financial investors and specify that each party will look after their own tax?
How would the returns work?
Could the parties providing funds grant loans to the development manager (a limited company - someone has to carry out the transactions) and at the sale of the developed property after circa 12 months, the investors receive a share of profit and return of their initial stake with each then paying tax according to their own situation?

Yes, you can do all of those things and write it into the agreement. The agreement would also provide that each party is liable for tax.

JGM and 4 other Law Specialists are ready to help you
Customer: replied 8 months ago.
Thank you