Joint Venture Agreement †Explained

A joint venture is a strategic alliance where two or more businesses pooling their resources and expertise to achieve a particular goal. Businesses of any size can use joint ventures to strengthen long-term relationships or to collaborate on short-term projects.
The prime difference between a joint venture and a partnership is that each member of the joint venture retains ownership of his or her property and members of joint ventures are taxed on the joint venture profits according to whatever business structure has been established for each business.
Before starting a joint venture, the parties involved need to understand what they each want from the relationship. Whatever your aims, the arrangement needs to be fair to both parties. Any deal should:

• recognize what you each contribute


• ensure that you both understand what the agreement is expected to achieve


• set realistic expectations and allow success to be measured

• access to new markets and distribution networks


• increased capacity


• sharing of risks and costs with a partner


• access to greater resources, including specialized staff, technology and finance

• the structure of the joint venture


• the objectives of the joint venture


• the financial contributions you will each make


• whether you will transfer any assets or employees to the joint venture


• ownership of intellectual property created by the joint venture


• management and control


• how liabilities, profits and losses are shared


• how any disputes between the partners will be resolved


• an exit strategy 

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