A joint venture (JV) agreement governs a collaboration between two or more businesses for a specific project or ongoing activity. Unlike a partnership, a JV is usually limited in scope and duration — the parties remain independent.
When you need a JV agreement
- Two businesses pool resources — one provides expertise, the other provides market access.
- Real estate development — multiple investors form a JV for a specific project.
- Technology collaboration — one company has the tech, the other has the distribution.
- Government contracting — joint ventures are often required for set-aside contracts.
Key terms
- Purpose and scope — exactly what the JV is (and isn't) authorized to do.
- Contributions — what each party puts in (cash, equipment, IP, personnel, distribution channels).
- Profit and loss allocation — how revenues and costs are shared. Consider tax implications.
- Management and voting — who makes decisions, how ties are resolved, and what requires unanimous consent.
- Term and termination — when the JV ends (project completion, time-based, or mutual agreement).
Critical provisions
- Intellectual property — each party retains ownership of pre-existing IP. JV-created IP should be jointly owned with clear licensing terms.
- Confidentiality — both parties protect each other's proprietary information.
- Non-compete — during the JV, neither party competes with the JV's specific purpose.
- Dispute resolution — mediation, then arbitration. Include a "shotgun" clause for deadlocks.
A JV without an exit plan is a lawsuit waiting to happen. Define upfront what happens when the JV ends, when a party wants out, or when the project fails.
Make it legal
- Authorized representatives of each party sign.
- Each party keeps a signed copy.
- Attach the business plan, budget, and any ancillary agreements.
A state-specific joint venture agreement drafted to your collaboration takes about ten minutes.