Key Terms Joint Venture Agreement

For example, if the undertaking terminates due to the failure of one party, the joint venture agreement should enable the defaulting party to remedy that situation. In many ways, joint venture agreements cover a territory similar to shareholder agreements, even if it is not a registered business. This is due to the fact that both sides are faced with a situation in which the parties pool their resources to achieve a common goal. In some cases, a shareholders` agreement is used as a joint venture agreement. If the company is not structured as a registered entity, it will deal with most of the issues covered by a shareholders` agreement. He can only treat them in a slightly different way. How a joint venture is terminated depends on the termination clause of the joint venture agreement. A well-developed agreement will contain detailed provisions on how the parties can withdraw from the Joint Undertaking, as this limits the litigation potential of a Joint Undertaking. When a joint venture is created in the legal structure of a company, there may be confusion as to the difference between a joint venture and a shareholders` agreement. A shareholders` agreement is an agreement between the shareholders of a company that governs the relationship between shareholders, defines their rights and safeguards and directs the company. Two companies or parties creating a joint venture may each have a unique context, skills and expertise. If combined by a joint venture, each company can benefit from the expertise and talent of the other in its business.

Each agreement varies on the specifics, but when I partnered with Ashley Ambirge of The TMFProject to create a comprehensive legal resource for entrepreneurs called “Small Business Bodyguard,” we made sure the absolute must-haves are covered…