A strategic alliance agreement formalizes a relationship between two businesses or individuals who work together for a specific, limited purpose.
- Working with another company or individual as partners for the purposes of a single project.
- Purchasing an asset or developing a product that may be shared by multiple companies or individuals.
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 may want to execute a strategic alliance agreement to formalize the working relationship and define each business’ respective role in a common undertaking.
A strategic alliance is an agreement between two or more parties that they will work together to pursue some mutual objective while remaining legally independent of one another. A strategic alliance allows parties to remain more independent than they would in a joint venture or partnership while still allowing businesses to work together and build long-term relationships.
A strategic alliance can be formed for the purposes of raising capital, sharing assets, developing new products, or any other purpose. Strategic alliance does not involve the conveyance of any rights of ownership, so the companies involved remain entirely independent.
A strategic alliance agreement should address the scope of the project or venture at issue, the roles and responsibilities of the company involved, 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 with another company, use this strategic alliance agreement to create a workable framework.