A joint venture is a business relationship between two or more people or businesses. A joint venture is formed when two or more people or businesses combine their efforts, ideas, or property for a single project or related series of transactions. A joint venture is usually formed by a contract (joint venture agreement) between agreeing parties. Joint ventures can range from a small activity to a huge, multi-million dollar project.
Joint Venture Agreements are a must when two or more persons or entities will be pursuing a business together because the contract establishes the understanding of the parties with respect to the business.
In addition, Joint Venture Agreements also usually provide for confidentiality provisions regarding protection of the information of the other partner, and non-compete provisions prohibiting any party from competing against the business being organized. In many cases, the Joint Venture Agreement will provide for the formation of a corporation or other type of business entity through which the partners will operate their business. In that case, the agreement should also provide for provisions regarding the transfer of the shares of the company and rights of the minority shareholders in the event that the shareholders do not own the company equally. The Joint Venture Agreement should specifically identify the rights and obligations of the shareholders.
Our team of professionals advise our clients on the various advantages, risks, structuring options, tax and financial considerations, and legal issues involved in creating and dissolving joint ventures.