Conditions Precedent

More-complex arrangements, such as JVs, can have a number of moving parts. You want to ensure that you commit as little money and effort as possible until you’re reasonably certain the deal will move forward. When you’re able to identify certain milestones that need to be achieved in order to progress (such as receipt of a business license or land-use rights), you can use them as conditions precedent to actions on your part. In other words, you can state that the JV must obtain land-use rights before you contribute the remainder of your portion of the registered capital.