Writing Partnership Agreements For Joint Ventures
Joint ventures have emerged as a great business tool to help business owners to monitor their marketing budgets without compromising with the growth of their business. Besides this, joint ventures can also assist businesses in gaining new customers as well as some new potential business partners.
Though getting involved into a joint venture can turn out to be very lucrative for your business, it’s always essential to form a comprehensible document that defines the behavior of the companies while in partnership. This keeps you protected and helps in developing more collaborative environments for partner companies to perform.
Basically, a joint venture agreement spells out the terms and conditions to be followed in partnerships. This agreement comprehends that the risks involved in the venture must be shared by all the partner companies. It further describes the advantages and risks for each company included in the venture.
It is utmost essential that you pen an agreement before entering a joint venture, as it assists you to have some control over the business project as and also incorporates the terms and conditions that have been penned by the partner firms.
Furthermore, these joint venture agreements should incorporate the executive protocols, along with the terms guiding the operations of the business you are poised to get into. These agreements highlight the intentions of each and every party and their roles in achieving the preset goals of the joint venture.
While working on striking the joint venture agreement, it is essential that the involved companies should decide upon the roles of the companies in it. Key inclusions involve naming the firm or individual who’ll handle all the policy matters and will be responsible for taking crucial decisions, who’ll be responsible for business promotion and devising strategies, who’ll be accountable the compensations, and other such matters.
Above all, the agreement should include a proper plan on how the profits and losses will be shared among the involved parties. This will help avoiding any sort of future dispute over financial matters.
The joint venture should be named as per the consensus of the parties, and it must explain in simple terms that who’ll bear all the expenses in the partnership. Besides, while writing such joint venture agreement, make sure that the agreement must explain that each party involved will be indemnified for losses, judgments, liabilities as well as expenses. This means that if loss occurs not due to neglect, then the partner companies won’t be liable to pay for it.
Along with these all important clauses, the agreement must also include the conditions owing to which the joint venture can be repealed. Generally these involve undergoing sales of the assets, jointly consenting upon to dissolve the partnership, or undergoing bankruptcy.
In a bid to create partnership documents effectively, you can either go for the assistance of a well qualified lawyer to prepare the documents, or can purchase ready to use partnership forms for the purpose. Both these methods offer you the much needed legal language for your joint venture agreement. In this manner you can simply assure that you can take care of all the required aspects before you actually get involved into a joint venture.