When investors come to bedding down their plans with their business partners, the best way to try to ensure their business proceeds as smoothly as possible is to document the agreements between the parties in ‘contracts’. These contracts come in many shapes and sizes.
When two parties, whether companies or individuals, decide to undertake a particular project together, they will sometimes create a ‘Joint Venture Agreement’ to keep a record of what each party has agreed to do. Joint Venture Agreements are usually used when the two parties have agreed to do certain things together, but are not forming a company together.
Just to complicate things even more, a Joint Venture Agreement will not be needed in every situation, or a Joint Venture Agreement may be combined with a Shareholders Agreement.
No-one likes having to use lawyers when they are doing business – this is a fact of life!
However, the reality is that ironing out the specific tasks and joint goals of a project before starting in the exciting things you are planning to do can save a lot of headaches and much greater lawyers’ bills down the track if your business relationship deteriorates.
A Joint Venture Agreement will set out the specific milestones the two (or more) parties are trying to achieve. Importantly, it will also set out who pays for what and what to do if one party does not do or pay for what they originally agreed.
Remember – not every project or business relationship will need a Joint Venture Agreement. For more information please contact one of our experienced corporate and commercial lawyers.