
Get exclusive money-saving offers and guides
Straight to your inbox
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
There are lots of opportunities in business for companies to succeed by teaming up with another company. If you decide to formalise an arrangement with another firm, you'll want to first sign an incorporated joint venture agreement.
Read on for a list of sites where you can download legal document templates. Also, find out how to ensure you include all the clauses you need.
A joint venture is an agreement made by two or more businesses to combine their resources to work together on a shared product or service. There are three main types of joint venture agreements: incorporated, unincorporated and unit trust.
The main difference between these types of joint venture agreements is the way the two businesses work together. With an incorporated joint venture, the businesses form a registered company that's a separate legal entity for the purpose of the collaboration. Each business owns a stake in the joint venture company, with the details of the share ownership laid out in a shareholders' agreement.
In an unincorporated joint venture, the businesses sign a legally binding contract but work within the structure of their existing companies. Under a unit trust, one company acts as a trustee that manages the assets and distributes profits on behalf of the trust.
Download this template at Lawpath
An incorporated joint venture agreement is just one of the legal documents you will need to complete when embarking on a new business venture and there are a variety of templates available online you can download and customise.
You should sign an incorporated joint venture agreement as soon as you decide to form an incorporated company with a partner. This will ensure that all participants involved are clear on the terms of the partnership and the resources that each will contribute to the new entity.
As your company may be competing with your partner organisation in markets outside of the joint venture, having a written agreement will help to avoid potential conflicts of interest and legal disputes.
Although the details of an incorporated joint venture will vary from company to company, there are certain points that are typically included in a written agreement. These points must be included to make sure the agreement is legally binding and provide protection if the worst happens and there's a dispute that ends up in court.
An incorporated joint venture agreement is essential when partner organisations establish a separate legal entity for their collaboration. Having a written agreement is highly effective as it clearly states the objectives of the venture and outlines the roles and responsibilities of the participants. This ensures that they have a clear plan and know where they stand throughout the project.
In the event of the joint venture failing and turning into a legal battle, an incorporated joint venture agreement will be vital in providing any legal and contractual evidence in the dispute.
There are some key differences between an incorporated joint venture and an unincorporated version. An incorporated joint venture is subject to the Corporations Act 2001 and is responsible for the taxes, expenses and compliance involved in its operations.
In an unincorporated joint venture, as there is no separate legal entity, each participant is responsible for accounting for its share of the obligations. An unincorporated joint venture agreement is most appropriate as a temporary arrangement for a single project.
That legal distinction means that the clauses in an incorporated joint venture agreement differ from those in an unincorporated joint venture contract.
Once all the parties involved have agreed on the terms of the arrangement, it may well be a good idea to get a lawyer to review the document. This can ensure that the agreement contains the details required under company law and that all parties will be confident about the legitimacy of the document. Ultimately, it's up to you to decide.
It is important to write an incorporated joint venture agreement in a clear and structured way with well-defined sections that are easy to read and refer back to when needed. The agreement should be designed and written so that the participants are clear on the objectives of the venture and what is required of them.
If the task of writing such an essential document is intimidating, you can use a legal template and customise it for your specific needs, so that the hard work is done for you.
Back to top