Joint Venture Agreement

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Updated Apr 4, 2023
~ 8 pages
A joint venture agreement (or JV contract for short) is a legal contract between two parties that set out to make a venture together based on mutual interests. These legal contracts are most often used by businesses that enter into temporary business relationships. Download this free legal template in PDF or Word format and fill it out in minutes.
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Template Description

Are you looking to undertake a joint venture with another business? There are many perks to forming temporary business relationships. It can be a way to leverage resources, save costs, combine expertise, or enter foreign markets. However, the terms and conditions of joint venture agreements have to be written correctly and in the right format. If you fail to do so, you could end up entering into an unfair agreement where you’re not properly protected.

Thankfully, we are here to help! Anyone looking to draft a JV contract can download our simple joint venture agreement template. This has the correct joint venture agreement format and all the relevant sections you need to complete. Plus, we share advice on how to file the contract, when you need to create one, and other must-know things for anyone entering into a new business relationship on this page.

What Is an Agreement of Joint Venture?

A joint venture agreement (or JV contract for short) is a legal contract between two parties that set out to make a venture together based on mutual interests. These legal contracts are most often used by businesses that enter into temporary business relationships. However, they can be used by other legal entities if needed. They set out the terms of the agreement, the requirements of both parties, and the overarching goal. In this way, the joint venture agreement protects both of the parties throughout the transaction.

What Types of Joint Ventures Are There?

There are two types of JV contracts: contractual and general partnership. The joint venture agreement format is consistent for both legal contracts, but their purpose is subtly different:

  • Contractual Agreements: When two parties join forces to carry out a specific business project without sharing profits or losses, a contractual agreement is made. This clearly details the terms and conditions of the joint venture agreement the business will be operating under for the course of the project.

  • General Partnerships: When two companies enter a more general business relationship and agree to share profits and losses from their joint venture, a general partnership JV contract is needed. These are typically reserved for real estate ventures or similar, rather than for other business endeavors.

How Do Joint Venture Agreements Work?

Joint venture agreements work by detailing all the terms and conditions of the new business partnership. This acts as a guideline for the project to help streamline the process and ensure both parties are protected throughout the business transaction. After both parties agree on the terms, they can temporarily enter into business together, knowing that they are protected.

Is a Joint Venture Agreement the Same as a Partnership Agreement?

A JV contract is different from a partnership agreement. Joint ventures are used when two businesses temporarily join together for the purpose of carrying out a project of mutual interest. On the other hand, partnership agreements are the legal contracts used for more permanent business collaborations and form a new legal entity. The latter always has a shared profit arrangement, and both parties usually continue working together after the initial project is completed.

Who Should Use a Joint Venture Agreement Form?

If you’re looking to enter a joint venture with other business entities, you’ll want to download and fill in our simple joint venture agreement template (Word or PDF available). As a type of business arrangement, they are usually used by business entities. However, these entities can be big or small, and domestic or overseas. No matter what business you have, a JV contract is a must for collaborations with other entities.

What Is Included in a Joint Venture Contract?

Our simple joint venture agreement template example includes all the necessary information and relevant blanks for you to fill in. This includes all of the following details:

  • Details of the businesses entering into the joint venture agreement;

  • The obligations of each party in terms of the investment of time, property, and money;

  • Which person will be responsible for the everyday running of the project;

  • The rules of the agreement and the overarching goal of the project;

  • How the profits will be distributed between both parties;

  • The term of the JV contract, including start and end dates; and

  • Exclusivity rights and confidentiality agreements between the parties.

How To Write a Joint Venture Contract?

Using our simple joint venture agreement template, it is easy to create a JV contract for your business venture. This gives you the right joint venture agreement format and outlines the terms and conditions of joint venture agreements clearly. All you need to do is download the form and fill in the blanks. Follow these steps to do so and you can’t possibly go wrong:

1. Provide the Names of Both Parties

You need to start the agreement by detailing both parties involved in the venture. This includes business names, a short description of the company and what they do, and their general business operations.

2. Describe the Purpose of the Venture

You then need to provide information on the purpose of the venture. Why are both businesses joining forces? What are you hoping to achieve? What is the final “goal” after which the project is considered complete? Without a clearly defined scope and purpose, the rest of the document is less useful. Put plenty of time into filling in these sections and ask for legal help if you’re unsure.

3. Detail the Contributions of Both Parties

Next comes what both parties will be bringing to the table in pursuit of the mutual goal. These contributions might be in the form of property, funding, other assets, or even employees. Both parties agree on these contributions before signing the JV contract.

4. Explain Who Runs the Venture

Other information on the joint venture goes next. Detail which person is responsible for the day-to-day running of the project. You’ll also want to provide information on who will be responsible for resolving any issues throughout the project, and what would happen if either party decided to terminate the agreement.

5. Write Confidentiality Clauses & Sign

At the end of the document comes confidentiality clauses and non-disclosure agreement statements. These are there to protect both parties from any arising legal issues. There is then an entire agreement statement at the end of the form. Sign under these statements for the contract to be legally binding.

When Should I Sign a Joint Venture Agreement?

Anyone intending to temporarily collaborate with another business or induvial to pursue a mutual goal should consider signing a JV contract. Joint venture agreements are in place to protect both parties. Working collaboratively can improve your chances of success and open up new opportunities, but it is important to have this protection. They’re even more important for transactions involving sensitive information or that will be working on a shared profit basis where disputes need to be avoided.

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Frequently Asked Questions

Can the terms of a joint venture agreement be changed?

The terms and conditions of joint venture agreements can be changed. However, this is only possible if all partners and/or shareholders agree to the changes to the contract. A new contract will need to be drafted and signed by all parties. Only when this has been done will the changes become effective.

What are the advantages and disadvantages of a joint venture?

There are many advantages of forming a joint venture for all types of businesses! A small business can gain the funding and marketing presence of a larger business, while larger businesses may access new research material from these smaller companies. Similarly, domestic companies can reach wider markets by joining a foreign company, while these overseas businesses can gain new expertise from an established domestic market. However, JV contacts don’t come without risk. These contracts can be unfairly balanced, with one party contributing more resources, expertise, and investment than the other. Whenever two businesses work together, there is also the potential of butting heads due to different management styles and ideas.

What happens if a joint venture agreement is broken?

A joint venture agreement is a legal contract and thus is legally binding in most jurisdictions. If either party breaks the contract, they are breaching the agreement and will face legal consequences if the other party decides to pursue the violation in court. This falls under civil law, and the violating party will usually have to pay for the damages caused as a result of their breach. In most cases, the venture will continue to run. However, one party will acquire the entire joint venture while the other party loses the right to any involvement.