A joint venture or JV is a type of business partnering in which two or more businesses work together to achieve a common goal. It is a combined effort from each party for mutual benefit. A joint venture agreement can be specific to a project and it can help cement the business relationship between the parties before the project begins. There's been a rise in the number of JVs with the introduction of the Commonwealth Government's Indigenous Procurement Policy. Indigenous businesses should ensure that they have strong foundations for their partnership and be enshrined in a written joint venture agreement.
agreement. There are some key legal issues that a business should consider when entering into a JV. Firstly, what legal form will the JV take?
A JV can take the form of an unincorporated joint venture or an incorporated joint venture. The purpose of the JV should be clearly listed. The contribution of each JV partner should be listed and what their responsibilities are. The share percentage of the ownership of the JV is determined by the JV's share Ownership of the business should be clearly detailed.
Decision making, how will the decisions be made between the parties? Financial arrangements should also be detailed. You should include a breakdown of the costs involved and the liability of each of the party to bear the components of the costs. Costs and liabilities should also be covered. And also, what happens when the joint venture ends or one party wants to leave?
Joint ventures can be very rewarding for both partners to the venture, but both parties should clearly agree on the boundaries of what their rights are. rights and responsibilities are. Thinking about this at the start can avoid a lot of headaches and provide a solid framework for working together which can assist partners, understand their obligations but also do well in their business venture.