A Roadmap to Joint Ventures

A Roadmap to Joint Ventures

A joint venture is a business arrangement where two or more parties come to an agreement to pool their resources for a specific task such as for a business activity or a new project. These collaborations are for the mutual benefit of the collaborative parties. Joint venture partnerships have many benefits for the parties involved.

If you are interested in setting up a joint venture partnership, you need partnership attorneys who will work with you. You want to make sure the terms of your partnership are clearly established. At The Chawla Law Firm, we know how to clarify your joint venture terms for the benefit of both parties. In today’s post, we will go into detail about joint ventures. Read on to learn more and contact our joint venture lawyers today!

Reasons for a Joint Venture

Joint Ventures are long-lasting — if not indefinite — complicated arrangements. Disagreements and conflict can arise over time as interests and priorities change and evolve. This is why a partnership attorney is so important when creating a joint venture partnership. There are many reasons a joint venture partnership may be established. They can be used to spread the costs and risks of a new business project so one company doesn’t take on all the risk. They can be used to expand access to financing. They can provide access to new customers or technologies that one party may not otherwise have access to. They can allow a party access to a new market. They can enhance the credibility of all or some parties involved. Finally, a joint venture can allow parties to explore the viability of a full sales transaction.

Key Issues in Joint Venture Partnerships

Joint venture partnerships are complex and require specific legal expertise to properly navigate. Partnership attorneys need to understand the goals of their clients entering a joint venture partnership in order to properly represent them. Some of the key issues that partnership attorneys must keep in mind are the allocation of ownership of the joint venture, the respective contributions to the joint venture, the economic rights of the joint venture parties, restrictions on the joint venture parties, exit strategies, and services or support from or to the Joint venture parties.

Structure of a Joint Venture

One important question that partnership attorneys must keep in mind is whether or not a separate entity owned by the joint venture parties should be formed to carry out the terms of the joint venture or if a contractual agreement between the parties will suffice. Some factors that play into which structure is better are the complexity of the joint venture’s purpose, the expected duration of the joint venture, the likelihood of expansion, and concern about liability.

Advantages and Disadvantages of Joint Venture Partnerships

A joint venture allows all parties involved access to the resources of the other parties without the need to spend large amounts of capital. A joint venture allows all parties to maintain their own identity and return to normal business easily once the joint venture has been completed. A joint venture also allows for shared risk among parties which is a benefit. However, joint ventures may limit the activities of an involved company while the project is in process. Also, resources may not always be divided equally. It is important to utilize a partnership attorney to ensure you are entering the best joint venture partnership for you.

If you are in need of joint venture legal services, The Chawla Law Firm can help. We offer access to incredible partnership attorneys that can help you flesh out your joint venture so you get what you need out of your joint venture partnership. Contact our joint venture lawyers today!