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How can I secure safety with a joint venture?


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  • 1 month later...

Hello Alex

The best advice would be to speak to a few accountants about how to properly set this up as it depends on your goals, financial situation of you and your partner and splitting the profit with your partner. An example setting up a limited company (SPV) for this purpose.

Can you elaborate on your goals? Is it flipping? buy to let?

It looks like you are targeting for long term and would not need to use any potential profit in the immediate future until you are comfortable to leave your job. In the limited company, it all depends how it is set up to split the profit as you mentioned you have more money invested. Food for though is may be setting up as 2 directors with shares or you being a director and shareholder. It all depends also down the way how much work your partner is going to put during acquiring properties, as being a director, there are a few duties and responsibilities, like providing gurantee for loans, required to provide paperwork, credit checks, etc. If your partner is providing less money, not in good credit check position, be handsoff, it's best to speak to an accountant before you set anything up.

Another way is to go personal names to acquire property and you will be both required to guaranteed for the mortagage ( I assume you are not buying cash) but with tax and trying building capital while you are currently working full time, it may not be efficient. In that case to split any profit, you will need to draft between you and your partner the agreements and have it validated with a solicito. Try to check with some solicitors who offers fixed fee for agreements review (https://www.catalystlaw.co.uk/) and try to look if you can find some tempalate for guildelines ( who is doing what, splitting loss/profit, etc)

In no way the information I provided constitute legal advice.

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