What Documents Are Needed for a Joint Venture

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  A business entity that enters into a joint venture is called an original entity, which can be organized as a limited liability company (LLC), sole proprietorship, any form of partnership or partnership. Other joint ventures are documented with contracts and look a lot like service contracts, so not so much like a joint venture. I have had clients who wanted to keep things very simple and streamlined and agree to a seven- or eight-page agreement on joint services. The difference between a documented joint venture with a simple joint service contract and any other service agreement you`ll see there is the intent of the relationship. If I hire an accountant to audit my business and sign a service contract to do the work, the accountant is one of my salespeople. When I hire an accountant to co-create a series of seminars for business owners, we are essentially partners (see my note on what exactly this word “partner” means). That is the difference. No. The word joint venture is confusing. It seems that it must have a clear legal meaning. But this is not the case. A joint venture can only be a contractual relationship in which two or more parties agree to allocate certain resources to an end goal, typically serving a specific geographic area or type of customer. Sometimes the parties to a joint venture form a separate entity, e.B.

  a limited liability company or a corporation. In this case, the entities are registered (formed) with the Secretary of State. In other cases, the joint venture will be a simple partnership. In Texas, general partnerships do not need to be registered with the Secretary of State. Joint ventures are a type of partnership and partnerships require effort. They are like weddings. They have two different companies with their own cultures and goals. They won`t always agree, and there will inevitably be grey areas where partners will have to discuss things and spend time seeing things from each other`s perspective. Some people/companies are less inclined to care about the views of others. So pay attention to who you`re working on – it can be crazy to work hard and be very fair when you find out your partner is all alone. Joint ventures come in all kinds of flavors.

  Some are not documented at all. Technically, this would probably be considered a general partnership. Some business owners may ask, “Do I need a lawyer to help me start a joint venture?” The answer is that you should probably hire a lawyer. There are many ways to submit a certificate of incorporation online or prepare some sort of joint venture or service contract. However, when it comes to complex relationships such as joint ventures, my experience is that standard (DIY) options tend to fall short. These solutions are not designed for highly individual and ever-changing contractual relationships, such as joint ventures. A joint venture organized as a separate entity is almost always organized as a corporation or LLC because of the limited personal liability offered to owners. This is particularly important if one of the original business units is organized as a sole proprietorship or as a form of partnership that does not confer limited liability on all partners. Any original business entity that is an LLC already has limited liability for its members, while any original entity that is a corporation already has limited liability for its shareholders. When a corporation is used, joint ventures file a charter of incorporation, articles of association, or similar document to form the corporation. They will prepare articles of association, resolutions and, as a general rule, a shareholders` agreement setting out the issues relating to decision-making and voting. They will decide other issues, such as what happens if they quarrel and how will they manage the joint venture later when the time comes (very few joint ventures would exist permanently)? For tax reasons, a joint venture incorporated as a corporation is taxed as a corporation.

  Similarly, a joint venture formed as an LLC is taxed as a partnership unless it chooses to be taxed as a corporation. Other equally important agreements will include agreements to effect the transfer of what the joint venture partners bring to the joint venture to achieve the objectives of the joint venture. These include technology transfer agreements, intellectual property assignment or licensing agreements, business transfer agreements, etc. Wonderful opportunities that can arise from a joint venture (JV). You can exchange ideas. You can share customer bases. You can grow your business with the help of another company. Remember, a joint venture is actually a partnership. This means that Florida law makes decisions about your business for you if you don`t enter into a joint venture agreement.

  The strategic alliance serves to promote a common goal, for a profitable company, the benefits of which must be shared in an agreed report. But different groups involved in a joint venture may view management, communication and their end goals differently. For this reason, it is important that each group agrees on the structure, functioning and objective of the Joint Undertaking. The Companies Act 2013 requires every company to have a Protocol of Association and Statute (AoA). The MoA and AoA are the founding documents of the company. A joint venture typically consists of two or more people or companies that join forces to carry out a project with limited scope and time. As soon as the project is completed or at a fixed time in the future, the joint venture ends. We`ve talked about this before, although an important question to consider is what each venturer will bring to the joint venture. They will clearly document this in the joint venture agreement and other documents. It is important to manage your expectations and those of other venturers by talking in depth about what you will each bring and your goals and expectations in relation to the company. Other reasons why companies may enter into a joint venture relationship could be to access broader markets, share resources, finance the growth of another company, develop or diversify products. .

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