On the other hand, each member of a joint venture of a complementary company is committed to ensuring the long-term viability of the company. Follow these instructions to create your joint venture. Once you have a good partner in mind and have submitted your statement of intent, you may want to consider creating your template for the deal. To decide whether disputes should be resolved through mediation or arbitration, you need to think about who wants to make a final decision: the members of the joint venture or a neutral third party. There may come a time when your company would launch a project and a strategic alliance with an individual or team would be needed to finalize it. In such cases, it is very likely that you should conclude a joint venture agreement so that everything is clear to both parties. Unlike a partnership that would last longer, or even lasting, a joint venture would only last as long as the project is underway. Once the project is completed, the joint venture would also be completed. If you opt to create a joint venture, you should define the terms in a written agreement. This agreement can help avoid any misunderstanding once the company is up and running. A written joint venture agreement should set out the issues related to the establishment of the joint venture as well as the legal rights and obligations between the parties. This type creates a new business or entity of two separate (and usually smaller) businesses. The main players involved in this type of joint venture will become shareholders of the new entity and it will then be used to manage the activities of the joint venture.
This type of joint venture is usually created when a parent company or a main enterprise enters into an agreement with its branches or small enterprises to transfer resources (such as technology), safeguard their intellectual rights or market their products and services in the national territory. The agreement covers general issues relating to joint ventures, but other documents, such as share acquisition contracts, shareholder agreements as well as the memorandum and articles of association, are required to provide the technical details of the operation of the joint venture. In a contractual joint venture, each member keeps separate accounting records and obtains a fair distribution of profits and losses. . . .
