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HOW IT WORKS
How it works
When your company has found the right business to partner with for a new project, service or other endeavor, you can outline the terms of your new undertaking in a Joint Venture Agreement. Joining forces can be profitable for both of you - and can also save both parties money - but you'll want to be sure to get all the details in writing with a Joint Venture Agreement.
Joint ventures allow you to tap into the knowledge, network, name recognition, or even production capabilities of another company or individual rather than going it alone. Usually, both parties have an equal stake in the venture, and will both reap the benefits. Prominent joint ventures include Dow Corning and MillerCoors.
In a Joint Venture Agreement, you'll lay out your business objectives, and how much each party is contributing. You'll also detail the roles and responsibilities for each joint venturer, and how the profits and losses will be divided. A Joint Venture Agreement is similar to a partnership, but lasts for a defined period of time. After the business project ends, the joint venture ends. In writing your agreement, you'll also want to specify how it can be terminated if it's not working out. Whether you're starting a new project or producing a new product, a Joint Venture Agreement is a way to increase efficiency - and profitability - for both of you.
Other names for this document: Joint Undertaking, Co-Venture Agreement, JV Agreement
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