There are many different ways to set up a joint venture, for smaller businesses a simple contract as to who will be responsible for which parts of the projects and how the parties are to shares costs can work. For larger projects, businesses usually opt to use to the limited liability route and set up a new company which will manage the joint venture. Other structures include setting up in partnership.
Why do joint ventures use a written agreement?
Whichever route is used, as business solicitors we are convinced of the importance in advising clients on the requirement for a joint venture agreement setting out the terms. Namely, the objectives of the joint venture, the financial contributions, the transfer of employees, ownership of intellectual property, how the costs are to be shared, who will have the management and control of the project, how will disputes be resolved and how the joint venture will come to end.
Together with a joint venture agreement setting out the legal, financial and operational responsibilities of the agreement the parties may also need to enter into confidentiality agreements to protect any trade secrets or know-how.
Whilst forming and setting up the joint venture are important, how the joint venture comes to end and what is to happen then is also vitally important. Where the joint venture has been set up for a specific project it will have a natural date of termination, but for other joint ventures this will not be the case.
Our commercial solicitors have years of experience drafting joint venture agreements and providing legal advice on the structures to be used.
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