A joint venture agreement is an agreement between two or more parties who want to carry on a business together for a particular period or till completion of a particular project. Instead of forming a partnership or incorporating any new company, a joint venture contract (“JV”) allows the parties to keep filing their tax returns separately still enjoy the benefits of a partnership such as sharing resources, profit, and risks. Entities engaged in the joint venture could be individuals, groups of individuals, companies, or corporations and keep their legal status separate. A joint venture may be formed by way of a contract that describes the resources—such as money, properties, and other properties each entity will contribute to the venture.
Generally, a joint venture may involve two entities with different areas of expertise, working together to create a new product or provide a new service. Sometimes, an entity trying to enter into a new geographical market form a joint venture with a company that is situated in or is established in the country or region.
The parties should clearly mention their intention as Joint Venture Agreements while drafting the agreement. To achieve the exact purpose of the Joint Venture Agreement, it has to be properly drafted by the parties.
A joint venture is an agreement and an entity created under such agreement can either be corporate or non-corporate.
