Joint venture agreements and what they can do for your business.

A joint venture agreement is a legal agreement outlining a joint-venture. A joint venture is a partnership that is usually created for a specific business or transaction project. Usually, a joint venture is undertaken for a limited period of time. In General, a joint venture will last for five to seven years.

For a joint venture, two or more companies agree to share the risks, rewards, capital, human resources and technology while forming a new company under mutual control. The agreement is generally formed for a particular project and will be usually be dissolved once the completed project. The members of the joint venture share all legal obligations and are treated in the same manner as a partnership on income taxes.

A joint-venture agreement can be made for many different reasons. They are frequently used for real estate transactions when two or more individuals wish to develop a particular piece of real property. They are commonly used by companies to find a foreign market. A foreign company will often have an agreement with a domestic company that is already in that particular market. Generally the foreign company can contribute new technologies and practices and the national company can contribute well established relations, government documents required and their experience to the joint venture.

There are a number of benefits that come to form a joint venture. One advantage is that it offers businesses the opportunity to acquire skills and capabilities. It also allows companies to enter a related company or the new market, as well as the technology gains and expertise. While they are legally "partnership", they are not to involve any kind of long-term commitment.

However, the financial needs and risks are shared between the original parties for the duration that reduces the overall risk and the financial obligations of each party. Joint ventures often lead to the development of new products and technologies.

Of course, a joint venture agreement is not without risks. There are a number of potential pitfalls. Individuals or companies may find that they have different philosophies, expectations or the objectives of the company. An imbalance can evolve in the degree of investment and the jurisdiction which is provided by individuals or companies. It may not be adequate support, identification or compensation for the management or senior management teams. The company styles and cultures of the joint venture partners may eventually come into conflict. None of these problems can lead to loss of profits, investment, time and energy. It is even possible to legal battles to ensue.

The forms involved in the creation of a joint venture include the agreement, a memorandum of agreement and any additional agreement. It is also necessary to obtain regulatory approval. This can be a time when it is useful to consult a lawyer and to make draft documents required, but as is so often true in the era of the internet, it is possible to buy uncompleted forms online.

Mark a. Warner research analyst is a Joint Venture Agreement for RealDealDocs.com. RealDealDocs gives you access to insiders to millions of legal online documents developed by law firm high to United States you can download, edit, and print. Search free of charge to the RealDealDocs.com.