The incorporation of companies with an industrial partner

The incorporation of companies with an industrial partner

Depending on the nature and objectives of the startup, the participation of an industrial partner may be essential, and even indispensable, for the scaling or viability of the company. This type of partner contributes through technical knowledge, practical experience, or access to strategic resources, particularly in technological, industrial, or creative sectors. Below, the appropriate legal framework for structuring these collaborations in a solid and coherent manner will be analyzed.

What is an industrial partner?

An industrial partner is one who, instead of exclusively contributing economic capital, provides work, technical knowledge, practical experience, infrastructure, or relevant contacts. However, this does not exclude the possibility of the industrial partner making financial contributions if deemed convenient or strategic.

Frequently, as compensation for their contribution, the industrial partner demands not only participation in the share capital but also the formalization of strategic contracts such as manufacturing, distribution, or commercial exploitation agreements. Such alliances can be decisive for startups that require specific technical expertise or access to relevant market resources.

Key legal aspects in the incorporation of companies with an industrial partner (or their entry into the share capital):

1. Shareholders’ Agreement

This contractual instrument constitutes an essential agreement that must be drafted with rigor and precision, exhaustively establishing the terms and conditions applicable to the relationship between the partners:

• The shareholders’ agreement must regulate fundamental aspects such as: responsibilities, rights, obligations, and mechanisms for resolving conflicts between the parties.
• In the case of contributions consisting of know-how, patents, or technical developments, it is essential to ensure the protection of these assets through the inclusion of confidentiality agreements, non-compete clauses, and specific mechanisms for their protection within the shareholders’ agreement.
• Incorporate clauses regulating breaches of obligations assumed by the industrial partner, clearly specifying the legal and economic consequences of such breaches.
• Include drag-along and tag-along clauses to ensure the protection of all partners’ interests in the event of potential share or equity transfers.
• Establish clear and objective criteria for valuing the industrial contribution, especially when it materializes in the form of know-how, infrastructure, or strategic services, as well as precisely determining the economic and political rights granted to the industrial partner as a result of their contribution.

To delve into the essential content of this contract, it is advisable to consult other specialized articles available on this blog.

2. Strategic Agreements

Strategic agreements that the industrial partner may formalize with the company (such as manufacturing, distribution, commercial exploitation agreements, technological licenses, etc.) must be negotiated and regulated independently from the shareholders’ agreement, although their implications may be reflected in it:

• Essential aspects such as: exclusivity, duration, renewal conditions, termination causes, indemnities, and penalties for breach must be defined with maximum precision.
• The interrelation between strategic agreements and the shareholders’ agreement must be properly regulated to avoid contradictions or interpretative issues that may lead to corporate conflicts.
• It is advisable to foresee specific dispute resolution mechanisms applicable to each strategic contract, as well as clearly establishing the legal consequences that such agreements may have on the industrial partner’s participation in the company.

Benefits and risks of incorporating a company with an industrial partner

The incorporation of an industrial partner presents evident advantages: the contribution of specialized technical knowledge, access to relevant infrastructures, strategic contact networks, and, where applicable, complementary financial contributions. The proper formalization of strategic contracts can significantly enhance the company’s operational and commercial capacity.

However, there are inherent risks that must be carefully considered and regulated. Industrial contributions can be complex to value accurately, and their effectiveness will largely depend on their proper implementation and follow-up. Additionally, divergent expectations among partners or the breach of strategic agreements may result in conflicts that affect the stability of the company.

Therefore, it is essential to adequately structure the commitments assumed by the industrial partner, establishing clear and consistent references between strategic agreements and the shareholders’ agreement, as well as the legal consequences arising from their potential breach.

In conclusión, the incorporation of companies with an industrial partner can be a decisive mechanism for the growth and consolidation of a startup, especially in highly specialized sectors. However, for such collaboration to be successful, it is essential to structure it adequately from the outset, through the formalization of detailed shareholders’ agreements and properly regulated strategic contracts.

Proper regulation of the rights, obligations, and expectations of all parties, as well as the protection of intangible assets and the provision of appropriate conflict resolution mechanisms, are essential elements to be considered in this type of corporate structure. A solid legal approach from the outset will make the difference between a successful business model and a prolonged conflict.