The combination of resources – A small business that does not have the influence of a sector and/or resources to pursue its business objectives could try to create a joint venture with a company that does. Another common joint venture is real estate. Two or more companies can create a joint venture to take over the construction of a new land. One can specialize in financing and the legal side of the property, while the others focus on the construction work itself and the management of the site. This allows all companies to make the most of their know-how while making progress together. Saving money — often a company specializes in one area that does not have the other. In this case, it is more financially wise to create a joint venture to use the other`s know-how rather than individually bearing the costs of acquiring all the know-how. A joint venture agreement is a contract between two companies or individuals who agree to cooperate to achieve a specific goal. A completed joint business model should contain details such as company members, member responsibility, company objectives, and start and end date. As with any complex business, international transactions, tax and competition considerations should be key factors. We will involve colleagues in our tax and business teams to tackle all issues. When considering a joint venture with another company, it is always a good idea to speak to a lawyer as part of your trial. When two or more parties wish to come together as a joint venture, they are usually faced with the choice between different legal entities – capital corporations, limited partnerships, partnerships, unit trust or joint venture.
If participants` expectations are ambiguous, inconsistent or inappropriate, significant difficulties may arise. We have participated in a significant number of joint ventures for companies, international investment firms and banks around the world. Our clients mandate us for their high-level work in this area and your Allen-Overy team relies on this experience and know-how to provide business and cost-effective advice. Since most joint ventures in the United States are incorporated as an LLC, you probably need to understand how to make an LLC. A joint enterprise agreement defines the terms and obligations of the members and the joint venture. If you are considering a partnership or joint venture, contact Harry Szmerling and Co.