Joint venture
A joint venture is 2 or more people, companies or organisations who work together for specific purpose or project, rather than as an ongoing business. You may decide to enter into a joint venture agreement for short and long-term projects, such as to:
- research and development
- create a new product
- provide a new service
- expand markets.
Each of the participants in the joint venture is responsible for profits, losses, and costs associated with it. However, the venture is its own entity, separate from the participants' other business interests.
Benefits of a joint venture
The benefits include:
- businesses of any size can enter into a joint venture agreement
- it is a temporary arrangement
- can help you grow your business
- the opportunity to collaborate and combine resources or expertise
- save money.
What is a joint venture agreement?
A joint venture agreement is a legally binding agreement that governs the relationship between the people or companies in the joint venture.
Some of the inclusions of joint venture agreement are:
- the structure, governance and obligations
- financial contributions
- division of profits and losses
- ownership of intellectual property (IP)
- disagreement or dispute resolution process
- leave or termination of the agreement.
Before you enter into a joint venture agreement, it is important to seek legal advice.
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