Check out this blog to learn about the benefits of using Joint venture agreement templates, preparing a joint venture agreement, its advantages, and other relevant information.
Benefits of Joint Venture Agreement Templates
A joint venture agreement is a lawfully enacted mutual contract between two or more parties. The concerned parties are willing to share their resources to attain a specific result. What are The Benefits of Using Joint Venture Agreement Templates
Usually, once the objective is achieved, such joint venture agreements end. Most project-based joint ventures are formed to achieve some objective and are made for a fixed purpose. They stand cancelled once the project is complete. During the agreement period, the parties benefit from share profits and distributed ventures. Their businesses also progress as they share the other partners’ expertise, resources, database, list of clients, services of trained, efficient, and motivated employees, and other facilities. Joint venture agreements are of two types- contractual and separate legal entities. The former agreement is done through a written contract. A separate legal entity is established through a limited liability company (LLC) or a corporation. A joint venture agreement must always be written because if any dispute arises, it safeguards your interests. A written document not only provides proof but also helps resolves the dispute.
Contents of a Joint Venture Agreement
An agreement contains
- Location of the business
- Type of joint venture
- Details of venture- name, address, purpose, etc.
- Beginning and ending dates of the joint venture
- Members of the joint venture and their contributions
- Roles and responsibilities of the members
- Details of the meeting and the voting
- Details of management, dissolution, and assignment of interest
- Clauses of confidentiality, Non-competitive, and dispute resolution
Joint Venture Agreement Templates
A joint venture agreement template needs to be created so that you can put forward your interests and decisions in front of the other would-be partners. You must realise that the partners are legally bound to perform accordingly after the agreement. So, it is important to prepare a template before the agreement is made. You should mention your needs, requirements, expectations, and capacity in the template. The responsibilities you will be able to bear should put returns you wish to receive.
Preparation of Joint Venture Agreements
A joint venture agreement must contain/ mention all terms and conditions that will safeguard the interests of either party. The agreement must be signed in writing and duly signed by both parties. In case of a dispute, the agreement will speak for itself since everything is documented in it in black and white the matter will be resolved according to the contract.
JV Agreement Clauses
Although there is no fixed legal format for a JV agreement in the country, below mentioned are some clauses that should be contained in a joint venture agreement to safeguard the members’ interests.
- Objective and scope of the project for which the Joint Venture is formed
- In case the joint venture is based on equity, then the Equity participation clause of both the parties should be mentioned
- Financial arrangements between the parties should be mentioned
- Composition of the board
- Management agreements
- Obligations Provisions of profit distribution
- Share transferability under various circumstances
- Termination of the JV agreement by exit of the parties
- Restrictive covenants on the joint venture and the members
- Appointment of CEO/ MD Anti-compete clause
- Confidentiality Indemnity
- Clause where both parties may indemnify each other against negligence, and violation of the agreement
- Duration of the JV agreement
- Clauses for Dispute Resolution
- Applicable law Force
Companies may make variations in the agreement according to the nature of their business.
Advantages/ Benefits of Joint Venture Agreement Templates
A joint venture agreement is created to serve all members’ interests. So, the agreement should define each member’s responsibility, rights, and liabilities in clear and precise language. All facts should be accurately described and should negotiate the terms in good faith. In case the need arises to add a provision to the agreement document, it too should be simply put and legally binding. It is important that you provide only that information in the agreement that is valuable to all parties. You should not include information that you don’t want to include. You must always consult a professional lawyer before entering into a written agreement.
Free Joint Venture Agreement Templates
You can find various joint venture agreement templates online. There are websites providing paid services to avail of their templates. They also help you in preparing a template of your own. Several websites offer free agreement templates too. There is no fixed format of the template as it changes according to the business and requirements of the parties.
You can visit us to draft your own agreement template!
Conclusion – Benefits of Joint Venture Agreement Templates
We hope this article has been useful in providing details of the benefits of joint venture agreement templates. As mentioned, the agreement is made according to the need for a specific joint venture. To prepare an appropriate template for your agreement, you should take legal advice to avoid any errors or omissions that may prove problematic for any joint venture member. Also, you must perform due diligence before deciding on the partner for a joint venture. You should take an informed decision and ascertain that the partner will increase your market value. Returning to the agreement template, it is advisable not to try making a draft of the agreement on your own as there will be many errors and omissions if you do so, which may prove against your interest. For drafting your agreement template, take legal advice or expert help online. They will help you prepare a template as per your requirement. Prepared by experts, they will prove to be near perfect, and there will be no reason for disputes.
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