Before you sign up for a joint venture, it`s important to protect your own interests. This should include developing legal documents protecting your own trade secrets and verifying the agreement between your potential partner regarding intellectual property rights. In addition, it is worth checking to see if they have other agreements with their employees or advisors. The only way to remove this shared responsibility is to form a legally separate entity for the joint venture (which we will explain below). Although a joint venture does not require you to form a separate entity, many companies opt for this path. If he has already designed such an agreement, he may consider certain sections as pro forma. But it will almost certainly look at you to look for direction in making the purpose of the joint venture. The joint enterprise agreement must provide clear measures to manage the termination of the joint venture. For example, if the business ends due to a party`s insolvency, the joint venture agreement should allow the defaulting party to remedy the situation. More information can be found on the page of this manual for the creation of a joint enterprise agreement. The head of conditions, duly developed at the beginning of the process, will prove invaluable at this stage. The terms of reference terms are generally not legally binding, but establish a roadmap that the parties can use in the subsequent development of a formal agreement.

Among the issues that should be addressed in a good document on the conditions of the Heads of Terms is: this principle of sharing should govern the whole process. Many potential joint ventures, including large projects, died before the contract ink was dried, due to different objectives and selfish attitudes that did not correspond to the nature of the joint venture. The British Aerospace/Taiwan Aerospace Alliance is an example. After bitter negotiations, the two sides signed an agreement at a solemn ceremony in Taiwan. Shortly thereafter, Taiwan announced its intention to withdraw from the agreement. What for? Because their goals were different. Taiwan wanted to acquire new technologies that the British did not want to give, and the British wanted to conquer new markets in Asia that Taiwan did not want to grant. A joint venture can be used to combine both large and small businesses, to work on larger projects than they could individually.

There are key features of a joint enterprise agreement and points that you need to consider and/or include to ensure that your agreement leads to success and prosperity. On the other hand, in the case of joint ventures, the two parties unite to achieve a common goal and assume the same responsibility in the event of a problem with the project. You should take into account the hiring of your employees and keep in mind that people may feel threatened by a joint venture. It can also be difficult to build effective working relationships if your partner has another way of doing things. The joint venture agreement must indicate the exact amount of capital contribution expected by each member. It must also indicate when this capital is due. For example, a capital owner may agree to contribute up to 25% of the capital required, but only if this contribution is made in the final phase of the development process (last money in euros).