Section 273 of the Delaware General Corporation Law (“DGCL”) requires that the stockholders “shall be engaged in the prosecution of a joint venture” in order to seek dissolution of an entity under the statute. The question then becomes: what exactly does a “joint venture” mean?
The leading Delaware authority to date is a 1959 Delaware Supreme Court decision, J. Leo Johnson, Inc. v. Carmer, 156 A.2d 499 (Del. 1959). In Carmer, the Delaware High Court defined a joint venture as:
[A]n enterprise undertaken by several persons jointly to carry out a single business enterprise, not amounting to a partnership, for their mutual benefit, in which they combine their property, money, effects skill and knowledge. The contribution of the parties need not be the same; one party may contribute land, another skill and experience, the third cash.
Carmer went on to state that no formality is required for the establishment of a joint venture, but rather the primary inquiry as to whether a joint venture relationship has been created is based upon the facts and circumstances of the case.