Joint Venture Agreement
Joint Venture Agreement
Perth Commercial & Corporate Lawyers
A joint venture agreement is a key document when setting up a joint venture. If you are looking to enter a joint venture with another person or company, whether for business development, business expansion or property development projects, West Perth Legal can assist you with setting up a joint venture agreement and associated documents to help ensure a smooth start to your joint venture.
West Perth Legal’s legal services for joint ventures:
Advising on and setting up of a joint venture structure: advising on a suitable joint venture structure in accordance with your objectives, nature of business or project and risk tolerance.
Legal due diligence: conducting court record search of your joint venture partner.
Professionally drafted agreements: drafting custom agreements including joint venture agreements, joint venture management agreements, shareholders agreements, independent contractor agreements, confidentiality agreements, etc.
Legal review: reviewing and providing advice on draft or existing joint venture agreements.
Legal negotiation: negotiating the terms of a joint venture agreement in your best interest.
What is a Joint Venture Agreement?
The term joint venture is used when two or more parties come together for a common goal. A joint venture agreement is a legal document that outlines the relationship between the parties to a joint venture. It includes details such as:
- The joint venture structure
- The joint venture purpose and scope
- Management of the joint venture
- Each party’s contribution to the joint venture
- Each party’s interest in the joint venture
- Assignment of joint venture interests
- Dispute resolution process
- Dissolution of the joint venture
A joint venture is formed for various reasons including for business expansion, research and development, large infrastructure projects, innovation and entering new markets or industries. Various benefits of joint venture include the sharing of resources, risks, expertise, and the ability to gain more capital or enter certain markets and industries.
A joint venture agreement is a key document between the parties to a joint venture. Having a customised and professionally drafted agreement will help minimise dispute. West Perth Legal’s Commercial Lawyers can assist with providing advice on the suitability of a joint venture structure for your objectives; drafting the joint venture agreement and related documents to take into consideration liability, management, cost sharing, assignment of interests; and negotiating the terms of the agreement with other parties.
Why is a Joint Venture Agreement Important?
A joint venture can take on a variety of legal structures. This includes a corporation, a trust, a partnership or an unincorporated association. The most used structures are incorporated and unincorporated joint ventures. Different legal structures carry different legal risks and liabilities, and tax advantages. A joint venture agreement will indicate the type of legal structure undertaken to perform the joint venture. This is important as most joint venture parties do not want the joint venture activity to affect their primary businesses.
A joint venture agreement will address contributions by each party, whether the parties are liable in respect to costs, losses and debts of the joint venture and in what proportion. This is important as it deals with each party’s liabilities.
A joint venture agreement will define the participating interests of each party, the joint venture activities, and when the parties have the right to share the product or output of the activities and in what proportions. An assignment of participating interest can be addressed through an assignment provision, which provides clarity over the addition of a third-party participant.
A joint venture agreement will address if the parties have separate and identifiable interests in assets used in joint venture, and the type of ownership of the assets. This will help protect each party’s assets.
A joint venture agreement will address the day-to-day management of the joint venture, and if a manager or operator is to be appointed and in what capacity that manager will act. The parties to a joint venture may be bound by the acts of a manager or operator acting as agent, which creates liability risk for each party. This can be minimised with an appropriate legal agreement with the agent.
A joint venture agreement can address the process for dissolution when a party to a joint venture wants to leave, or when the parties wish to dissolve a joint venture. Joint venture parties to a corporation who wish to sell its shares could also consider agreeing to pre-emptive rights in its agreement with the provision of ‘tag along’ and ‘drag along’ rights. These determine which party has right to compel the other to sell its shares in the joint venture to a third-party purchaser and on what terms.
A joint venture agreement can also address the dispute resolution process, and what constitutes a default by a party.
Frequently Asked Questions
Commercial & Corporate Lawyers
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