Dominican Joint Ventures
Dominican Republic Law recognizes business entities which are contractual in nature and which are called “joint participation” entities. They are considered as business entities as long as their purpose and scope of activities are commercial in nature.
These entities are incorporated through a contract by which two or more persons who have the condition of businesspersons take interest in one or several determined and transitory business operations, who one of them must execute in its own name and personal credit, with the condition of being accountable and dividing with its participants the earnings and losses in the covenanted proportion.
It is important to note, that the creation of these entities will not create a new entity with legal personality, the entity will not operate under a separate corporate name, assets and corporate domicile, but instead will be recognized as a matter of contract.,
Therefore, contractual joint venture agreements must be carefully drafted to ensure clear and balanced partner representation, management powers and accountability rules.
Finally, the joint venture entities function, dissolve and liquidate, in lack of special provisions, pursuant to the provisions of the general partnerships as long as they are not contrary to the legal provisions indicated in the section of law applicable to accidental or participation entities.
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