Joint venture agreement

When most people think of a Joint Venture Agreement they tend to think about big multinationals on huge projects but joint ventures of all kinds are becoming an increasingly important way of doing business for small business also.

Whilst Joint Venture agreements for small business need careful consideration, legal advice needs to reflect budgets, practicalities and risks.

The issues arising with Joint Venture Agreements are broadly similar to those in shareholders agreements. Having found a great business opportunity and identified a possible business partner who either adds something to the possible JV in terms of expertise, contacts, resources or synergy, it is important to then focus on practical realities and legalities.

To minimise the possibility of misunderstandings or disputes, a Joint venture Agreement should incorporate the following essential  clauses :-

  • The structure of the business and whether assets and employees will be directly employed in the joint venture structure or remain with the parties
  • Agreement on division of profit & loss and tax
  • whether either party can charge fees for providing particular services, outside of sharing profits
  • Responsibilities for day to day operations and strategic decisions
  • Events of default and dispute resolution procedures
  • Practical issues such as bank mandates, operational restrictions
  • ¬†Exit strategies and termination of joint venture agreement
  • ownership of assets in the joint venture

Please get in touch with David Swede or by calling us for a free initial discussion or a fixed fee proposal.

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