TYPES OF JOINT VENTURE AGREEMENTS
Following are two types of joint venture agreements
- Contractual
- Separate legal entity
Contractual joint ventures exist exclusively through a written contract. In contrast, a separate legal entity is set up through a corporation or limited liability company (LLC).
ELEMENTS OF JOINT VENTURE AGREEMENTS
Some of the most important elements of JV agreements are:
- All the objectives that the joint agreement was created for.
- A clear layout of the contributions provided by both companies whether in cash or assets, as well as the value of all those contributions.
- Each of the parties' individual functions in the project is specified.
- Instructions on how the parties will communicate to stay updated on the progress of the project.
- The period that the partnership will be in effect.
- Instructions for how the venture can be terminated if it no longer works out.
- Terms laid out for who will manage the general options of the project.
- Whether profits will be established on the level of contribution of each party or by a specific formulation.
- A section that includes terms for specific details of the project.
A legal expert is required to draft the legal document to make it precise and accurate.
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