Legal Problems in Venture Capital Companies

Venture capital firms are the most important tools for supporting and financing various business investments, whether through direct investment, contributing to investment funds, or providing financing for high-risk small and medium- sized projects with promising growth potential. Their role often focuses on financial support as capital for projects engaged in creative ideas, technology-related to businesses, or offering technical, marketing, or administrative support, In doing so, they contribute to economic growth and stability by creating various job opportunities. These companies are called venture capital firms, bold, daring, or risky capital firms because of their role in contributing, financing, and participating in project management. This involves entering into partnerships with existing companies or becoming a shareholder in them when starting a business by providing sufficient financial support to help these projects achieve their goals. However, they are simultaneously threatened by the risks of project failure or delayed profit realization. The Jordanian legislator, in regulating this type of company, issued a law, which includes specific legal provisions different from other types of companies regulated in The Jordanian Companies Law. Nevertheless, the implementation of the provisions of this law may face several legal obstacles, which we will discuss in the following pages to prevent conflicts between its provisions and the general rules of the Companies Law. These issues include partner categories, the lack of a specific legal form for these companies, and provisions related to management and legal guarantees in dealing with such companies.