| The Joint Venture Agreement legally creates the joint venture through the process of contract, and identifies the major rights, duties, and obligations of the participants of the joint venture.
The Joint Agreement identifies:
* The project or object of the joint venture;
* The contribution, role and involvement of each co-venture;
* The terms or duration for which the joint venture will exist;
* The provisions for management and performance of joint venture obligations; and,
* Allocation of revenues and expenses from the project.
The Joint Agreement checklist:
1. The date on which the agreement is established and executed.
2. The names, addresses, and identification of the parties, including the type of business of each member of the joint venture.
3. The name under which the joint venture will do business.
4. The principle place of business of the joint venture.
5. The purpose of the joint venture. If the purpose is to access a specific project, a full description of that project is required.
6. The terms of the joint venture: when and how the joint venture is terminated; and, how such items as guarantees, defects, and insurance will be handled after termination.
7. A statement that the parties are actually co-ventures for the project whether or not the contract is in the name of all members.
8. A declaration that the organization is a joint venture, not a partnership.
9. The establishment of a fund by the parties to finance the work, together with the amounts to be contributed by each party, for more detail visit www.jointwebventures.com with the fund being deposited in a special bank account under dual control and all progress payments and other revenues being deposited in such account.
10. A clause providing that, if additional working capital is required, the parties will proportionally contribute additional funds, as needed and naming the penalty for failure to contribute.
11. A declaration of the participation of the parties and percentage in which profits and losses are shared. Usually these percentages are proportional to the contributions to the working fund, for more detail visitwww.joint-venture-guide.com but the amount of contribution of funds by parties can be increased or decreased depending on the contributions of equipment or expertise, which also must be considered.
12. Payment of any fee to the controlling co-venture or sponsor should be specified; whether a share of the profits in excess of that contemplated is given to the controlling manager or a flat dollar sum is paid.
13. If equipment is involved, a specific clause should be inserted especially where the parties contribute varying amounts of equipment.
14. The parties to the joint venture should agree to sign all necessary documents relating to the contract, bank loans, bonds, indemnity agreements and the like.
The nature, size, and complexity of the project together with the sophistication of the parties will determine the detail in which the Joint Venture Agreement is prepared and aforementioned topics dealt with. This checklist is meant only as a guide to putting a Joint Venture Agreement together. The appropriate professional services, such as legal counsel should be sought out and utilized.
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You may wish to contact the Lawyer Referral Service toll free at 1-800-667-9886 for assistance in locating a lawyer who specializes in this area. |
