My business partner and I are interesting in staring a joint venture to explore new opportunities in emerging markets. We are just at the beginning of the process now and want to start investigating suitable participants. What sort of initial checks should we be doing?
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Answer by LegalEagle™ staff, Northcote VIC 3070
- Most of the checks will depend on the type of industry you operate in although there are some basic initial investigations that you should always undertake regardless of the type of project or industry.
- If the potential participant is a corporation you should check the public government registration records to find out who the directors are, whether there are any shareholders and in what proportion are shares held.
- The public registers maintained by Australian Securities and Investments Commission (ASIC) will contain a wealth of information about the company's track record including any recent insolvencies or legal proceedings. You can print out a range of information from their online databases at www.asic.gov.au.
- Investigate the qualifications and experience of any directors or managers involved in the company. This should ideally include a check for any criminal convictions or other offences that indicate the person may not be a fit and proper person to do business with.
- These are some of the more basic investigations to begin with. Before establishing a joint venture you should engage a lawyer to undertake further investigations of any potential business partner. A lawyer can also recommend ways to protect any confidential information or intellectual property for use by a joint venture participant who under other circumstances would be a direct competitor.