Definition

A joint venture agreement is a binding contract between two parties that agree to share capital and resources to undertake a business project. Usually, these ventures will not involve the creation of a new legal entity unless the parties decide to file for one. Joint ventures are non-transferable, that is, possession of a joint venture cannot be transferred to another person.

Essential Characteristics

Unlike a partnership that concerns an ongoing business relationship, a joint venture concerns a single project or series of transactions. Therefore, a joint venture agreement should encompass terms that consider the following:

• How profits and expenses will be shared
• The duration of the agreement
• How the agreement will terminate
• The rights of each joint venturer to control and manage property