In the absence of a joint venture agreement, the law may consider your cooperation to be effectively a legally recognized partnership and apply standard state laws for tax and liability purposes. If this document is fully completed, it must be signed by all parties and each party must keep a copy. As far as possible, the original must be kept in the assets of the Joint Undertaking itself. This type creates a new business or entity of two separate (and usually smaller) businesses. The main players involved in this type of joint venture will become shareholders of the new entity and it will then be used to manage the activities of the joint venture. PandaTip: This draft joint venture agreement provides for a contractual agreement rather than a joint venture partnership or joint venture of shareholders that would create a separate entity. Since the joint venture agreement is an essential document for entering a joint venture, it probably has many advantages, right? The answer is yes, there are many advantages in drawing up a real draft joint venture agreement which we are going to discuss now. Learning these benefits would help you make an informed decision about your desire to make one for your next joint venture. The document is an important fundamental document for the creation of a joint venture with another person or undertaking and helps the parties to sketch out clear communication for their joint venture. A partnership usually concerns a single legal person owned by two or more persons, while a joint venture agreement covers a short-term project between several parties.
There are different types of joint venture agreements that you can conclude. They depend mainly on the objective of the Joint Undertaking and the objectives it is to achieve. In any event, a joint venture between two separate parties who want to achieve the same objective for their own benefit should be agreed.