Among other legal options, it would be prudence to first prepare and execute a Joint Venture Agreement (or Shareholder Agreement) which governs the rights and obligations amongst the shareholders in terms of conducting business and management because. The sample of essential terms and conditions of the Joint Venture Agreement should cover the followings:

• Board Representation and Participation

Minority shareholders should have the right to agree on the number and nomination of directors as their representatives on board of the company in order to balance the management power and stay informed about the company’s activities. Ideally, those directors appointed by minority shareholders should be required as a necessary part to incorporate into quorum.

• Key Management Personnel

In addition to the Board of Directors, the minority shareholder should extensively have the right to nominate the key management personnel e.g. CEO, CFO, and COO so as to balance the internal control of the company.

• Affirmative Right

In a joint venture, the shareholders could mutually agree on “Affirmative Right” in favor of minority shareholders. This right create obligation on majority shareholders to seek prior approval from minority shareholders before making decisions on “Reserved Matters”, which are not the ordinary course of business, but are matters that generally affect shareholders’ interest in the company, for instance: (i) any changes in the share capital structure of the company; (ii) any matters with respect to issuance of capital or dilution of shares; (iii) any appointments or removal of key personnel, etc.

• Restrictions on Share Transfers

When forming a joint venture, minority shareholders may make a decision in reliance on the long-term involvement of majority shareholders with capacity, resources and experience. If transfers of shares to a third party are permitted, premature department of majority shareholder could leave minority shareholders inappropriately tasked with duties that they may lack capacity or operational expertise necessary to continue the project. For this reason, minority shareholders should consider requesting a “Lock-Up Period” where no transfers of shares are permitted