A joint venture agreement creates a partnership between two businesses for specific purposes over a limited amount of time.
- Working with another company or individual as partners for the purposes of a single project.
- Purchasing an asset that may be shared by multiple companies or individuals.
A joint venture agreement legally establishes a joint venture between two businesses. A joint venture is a temporary partnership of two businesses or individuals who work together for a specific purpose. The joint venture can be formed for the purposes of bidding on a project, purchasing and managing a co-owned asset, or any other purpose. However, unlike other forms of partnership, a joint venture does not involve the conveyance of any rights of ownership over the companies involved.
Joining forces with others can be a great way to pool resources, especially in very competitive industries. In some cases, businesses who would otherwise be competitors may decide to work together so that they can perform more efficiently and make more money. When this happens, the parties should execute a joint venture agreement to formalize the working relationship and define each business’ respective role in the project.
A joint venture agreement should address the scope of the project or venture at issue, the roles and responsibilities of each partner in the bid, how and in what amount payment will be made, and terms regarding dispute resolution and termination of the agreement in the event the parties find they cannot work together. If you are considering working jointly with another company, use this interactive joint venture agreement to create the framework for this limited partnership.