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Get Started on Preparing of Joint Venture Agreement Start Collaborating Towards a Mutually Beneficial Venture!
Are you and your partner interested in working together on a venture, but not sure how to go about it? 3E Accounting has got you covered, and we can help you with just that. There are many reasons as to why two or more people would pool their resources together into a joint business venture and the results of such an alliance are almost always beneficial for the entrepreneurs involved. Certain benefits include having more resources, larger production capacity, increased technical expertise and more distribution channels, provided the two or more parties collaborate well with one another. Such ventures open up doors for many opportunities which are profitable and lucrative. The learn on preparing of Joint Venture Agreement and start collaborating towards a mutually beneficial venture!
Types of Joint Ventures
Depending on which you are keen on, there are various forms of such relationships with each encompassing different characteristics but mostly the same dynamics. Some ventures form a new company, some help another business in specific ways, and some require the merging of two or more existing companies. Your business partner and you will have to determine which is appropriate.
Understand and Address the Risks
Every venture has its share of risks. Fortunately, before you commit to one, you can take steps in mitigating these risks. One of the most common is the misalignment of communications, work culture and core values or objectives. Like any other relationship, mutual understanding is of utmost importance, and it would collectively serve the venture well if the minds behind it are on the same page.
Though such is a preferred state, it is up to you to determine who or what company you would like to work with and we recommend that you attempt to see if there are enough common grounds to hint at a possible successful future partnership. On top of that, you should also ensure that both parties invested enough as expected in terms of money, leadership and expertise. You must also assess whether your business is ready for such a venture. 3E Accounting offers a variety of corporate services, including advisory in helping you to make informed decisions. We consist of teams of seasoned professionals who can help guide and advise you on the best course of action.
Drafting a Joint Venture Agreement Contract
Once you have determined that you as well as the other party are ready to work together, you will need to make a formal agreement. A written and signed document that highlights the many aspects of your business relationships. Fortunately, 3E Accounting also offers legal services such as drafting contracts, licensing and many more. We understand that drafting out a contractual agreement can be a comprehensive, yet tedious process and we are prepared to assist.
To help you understand, the following are some of the important things the contract will cover:
- A statement of all the parties involved as well as their agreed-upon roles. This highlights the people or entities that the contract is bound to and at the same time lists the roles and responsibilities of both parties.
- Definitions to some important terms. There are many terms that are best explained in the clearest manner possible and these include; intellectual property, debt, liabilities and internal contributions.
- Objectives of the joint venture. Objectives help with clarity as to what is being expected from all parties involved.
- Governance Structure. Explaining how management works and the actions that would entail under different circumstances. It also explains the power as well as the bounds of certain positions and reporting.
- Delegation. Explain which party will contribute what to that venture.
- How to profit, losses and liabilities are shared. This will make clear of how resources are being shared and avoid possible disputes in the future.
- Dispute resolutions. Disputes can happen and a good contract will entail possible solutions such as mediation, negotiation, binding or nonbinding arbitration and litigation.
- Termination procedure. Just so there is a beginning, there will also be an end. This can happen for a number of reasons and when it does, the procedures laid out can help.
Managing a company can be a momentous task and creating an alliance may also add to it. If done properly, a joint venture can lead to huge returns; at 3E Accounting, can assist you through it all with the many services we provide from drafting contracts to accounting. Consult us for your preparing of Joint Venture Agreement today!