8.5 A subscription for ordinary equity shares or partnership capital is the simplest and most common way to capitalise a JV. This subscription can be in the form of a capital or non-cash (assets, IP etc) consideration. The law of England and Wales provides a flexible system in which various types of shares can be issued with different rights associated with them. Shares of the same type are referred to as a "class".
8.6 Different classes of ordinary shares with differentiated rights and restrictions can be used to protect the interests of the public sector body, particularly where it is a minority participant, subject to the restriction on "golden shares" (see Annex D "Special Shares" for further explanation). The extent of control on the JV exerted through such class rights may affect its classification. A class of ordinary shares may carry the right to appoint a designated number of directors/administrators to the board and/or a right of veto or approval over certain matters which must be decided by the shareholders.
8.7 Partnerships have partnership capital. As with companies, partnership capital can be purchased using cash or non-cash assets. Partnership capital can be divided into different classes with differing rights in respect of distributions of the partnership's profits and capital. The rights attaching to each class of capital will be set out in the JV Agreement.