It is now a common tactic for public figures and businesses to choose to create joint ventures over classic licensing forms. The most widespread sectors of engagement are Alcohol, Beauty, Health and Wellness, while those of Food and Beverages, as well as Products for Pets and Animals, are also emerging rapidly.
First of all, what is a Joint Venture? It is an agreement, in Greek law called «κοινοπραξία», which is jointly concluded between several natural or legal persons, who aim to achieve a certain common goal, while each of them retains its autonomy and legal personality. Through the synergy of their actions, they aim to achieve a better economic result.
The formation of a Joint Venture requires a written form, but a private document is sufficient. It is either a civil or a commercial company depending on the commercial or non-commercial nature of the intended purpose. If its purpose consists of the habitual exercise of commercial acts, it will be commercial. If commerciality is inferred, it will fall within the scope of commercial law and consequently will have to be subject to one of the company types recognized by commercial law and the respective provisions will apply. If, on the contrary, commerciality is not inferred from its nature and purpose, it will be treated as a civil company and will be governed by the corresponding provisions of the Civil Code.
The reason why this form of contract is increasingly chosen over licensing is the more direct connection that is given to the members of the contract with the purpose of the joint venture and its economic prosperity. In this way, the possibility and risk of undermining the business by the public figure is reduced, since if this is noted, they are also directly economically harmed. Therefore, it is an alternative that combines the advantages of licensing (article, “What is licensing?”), with the equal distribution of commercial and other risks between the parties.
Of course, the purpose of these contracts is not only the corresponding content that a licensing agreement has, but this is usually an important point of them. The main licensors can act as sub-agents, and commissions are often lower due to the diffusion of profits. In addition to a share of the profits, public figures usually also receive a minimum guarantee, which is paid over time.