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.
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