Create a joint venture agreement
How to create a fair and detailed joint venture agreement and establish the contractual terms for your new business operation.
When you set up a joint venture, you should put the terms in a written agreement. This helps prevent misunderstandings once the venture begins.
What goes into a joint venture agreement?
The agreement should clearly set out how the joint venture will be formed and how each partner will work together. It should cover:
- the structure of the venture, for example, if it will be a separate business
- the name and aims of the joint venture
- how long it will last and any options to extend it
- what each partner will contribute, such as money, assets or property
- when and how partners can withdraw their investment
- any assets or staff transferred to the venture
- who owns any intellectual property created
- how the venture will be managed and controlled
- how profits will be shared
- how losses and liabilities will be handled
- how any disputes between the partners will be resolved
- an exit strategy for ending a joint venture
You may also need to agree on other issues, such as:
- confidentiality - to protect any commercial secrets you disclose
- insurance - against loss where reasonable and especially if it is industry standard
- indemnification for both parties in the venture
Multi-party joint venture agreements
Multi-party joint ventures can be complex, especially when dealing with governance, decision-making, ownership and exit arrangements. Whether you are setting up a joint venture between two businesses or several partners, it is important to get independent legal advice before making any final decisions.
You can download a template for a joint venture agreement (PDF, 17K) to help you get started.