Structuring Joint Ventures (SPVs)
The safest and most professional way to structure a property Joint Venture is by creating a new Special Purpose Vehicle (SPV) limited company where partners hold distinct share classes.
Entering into a Joint Venture (JV) based purely on a handshake or a basic contract is incredibly dangerous. The industry standard for structuring JVs is the incorporation of a dedicated Special Purpose Vehicle (SPV) limited company.
Both the Money Partner and the Time Partner become shareholders in this new company. If profits are to be split 50/50, they take a 50% shareholding each. This provides extreme clarity: the company owns the asset, and the partners own the company.
Director's Loans
Crucially, the Money Partner's capital is not given to the Time Partner; it is injected into the SPV as a formal Director's Loan. A legal agreement stipulates that the Director's Loan must be repaid in full before any company profits can be distributed as dividends to the shareholders.