A social Joint-Venture (JV) is a contractual collaboration between two or more stakeholders (companies, associations, etc.) to create a separate legal structure dedicated to a socially useful project.
Any action that aims to satisfy needs that are not normally or inadequately met by the market, and that benefits people whose situation requires them to compensate for a health, social or economic disadvantage, is socially useful.
This structure combines the skills and resources of stakeholders to maximize the project’s social and environmental impact.
How to create
There are several legal forms for a social JV, each with its own advantages and disadvantages:
- Société par actions simplifiée (SAS): Offers contractual freedom and attractive tax treatment.
- Société à responsabilité limitée (SARL ): simpler and less costly to set up, but less flexible than the SAS.
- Association loi 1901 : Suitable for non-profit projects, but not easy to raise funds.
- Foundation: A long-term, tax-advantaged structure for large-scale projects.
Drafting the JV Contract
The social JV contract, drawn up between all the parties involved, is an essential document that defines the key elements of the project:
- Corporate purpose and mission of the JV
- Stakeholder input
- Governance and decision-making
- Financing and profit distribution
- JV duration and exit conditions
Operation and governance
A. Governance bodies
The social JV must have transparent and inclusive governance bodies:
- Annual General Meeting: Brings together all stakeholders and votes on important decisions.
- Board of Directors: Determines the JV’s strategy and oversees its management.
- General Management: Responsible for the day-to-day management of the JV.
Financing and stakeholder remuneration
JV financing can come from a variety of sources:
- Public subsidies
- Private investments
- Philanthropic donations
- Revenues generated by JV activity
Stakeholder remuneration must be defined in the JV contract and comply with SSE principles.
The social JV is a relevant tool for developing projects with a social and environmental impact. The choice of legal structure, the drafting of the contract and the establishment of effective governance are key elements for the success of the JV.
In this context, our consulting firm Axone Consultant can support you in defining your social purpose, deploying it and evaluating and measuring the social impact of your social joint venture.
Useful resources :
Social Joint Venture Pack: https://socialcobizz.com/packmethodo/
Further information: https: //socialcobizz.com/2017/08/les-joint-ventures-sociales-en-france-panorama-et-perspectives/
