JV: Ride On Private Or Public Co Vehicle?

It is quite common to find in a joint venture agreement provisions regarding the transferability of shares held by the joint venture partners in such a company. These provisions pertain to lock-in period when no partner can sell the shares, the right of first refusal in favour of the other partner in case a partner wishes to sell her shares, and put or call options on the occurrence of certain events.

These provisions are of critical importance for joint venture partners, and thus, it is important to have a joint venture entity where these can be legally enforced. Otherwise, the purpose of providing these provisions will be defeated. Enforceability of these provisions also vary, depending on the kind of company - private or public - formed by the joint venture partners.