Joint venture agreement template

What is a Joint Venture Agreement?

A joint venture agreement is a legal document that defines the terms and conditions between two or more businesses collaborating on a particular project or business activity.

The agreement lays out the obligations, rights, and responsibilities of each participant, ensuring that all parties are clear on the parameters of their partnership.

The agreement generally covers aspects like profit-sharing, decision-making processes, management structure, initial contributions, duration of the venture, and exit strategy, among other important elements.

Why are Joint Venture Agreements important?

In simple terms, a joint venture agreement is a promise between two or more businesses. They decide to work together on a project or a business idea. This agreement is like a set of rules for this teamwork. It answers important questions like:

1. Who will do what in this team?

2. How will the money earned (and spent) be divided?

3. How long will this team work together?

This way, everyone knows what to expect, and it reduces the chances of disagreements or confusion in the future.

Who creates and manages a Joint Venture Agreement?

Creating a joint venture agreement is typically a team effort. The legal departments of each participating business often lead the process. They collaborate, draft the contract terms, and ensure the agreement aligns with each company's goals and interests.

As for managing the agreement, the responsibility usually falls on the participating businesses themselves. This could be through designated managers or a joint venture committee.

Their task is to ensure all parties adhere to the agreement's rules and that the venture operates smoothly and successfully. This way, everyone knows what to expect, reducing the chances of future misunderstandings or disagreements.

What should a Joint Venture Agreement template include?

Usually, businesses will use a joint venture agreement template as a starting point for these relationships. But what should this template actually include? Well, there are a few core elements.

1. Identifying the participants: Start with clearly listing out all the businesses joining hands in the joint venture.
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2. Defining the aim: Outline the objective of the joint venture. What exactly are you all working together to achieve?
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3. Duration of the agreement: Outline the timeline for which this collaboration is planned. Is it tied to a specific project or is it for an indefinite period?
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4. Resource sharing: Clarify what each business is bringing to the table. This can be in terms of money, manpower, materials, or expertise.
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5. Profit and loss sharing: Decide how the profits or losses will be divided among the businesses. It might be equally, or it could be based on each business's contributions.
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6. Management and control: Spell out who will be in charge of the day-to-day operations and big decisions. This can help avoid confusion later down the line
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7. Confidentiality terms: Include guidelines about keeping the joint venture's sensitive information confidential. This helps protect everyone's interests.
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8. Exit strategy: Don’t forget to plan for the end. Include details on how and when a business can leave the joint venture, or what happens if the project is completed or needs to be dissolved.

This isn't a comprehensive list, though. Each joint venture agreement is unique, and you'll need to customize your joint venture agreement template to reflect the specifics of your partnership and the terms you've already agreed informally.

How do business manage a Joint Venture Agreement?

Managing a joint venture agreement manually isn't a walk in the park. It involves various steps and processes, each with its own set of challenges. Here's a step-by-step breakdown:

1. Drafting the agreement

‍The process begins with drafting the joint venture agreement using word processing software like Microsoft Word. This involves carefully crafting each clause to reflect the terms agreed upon by all parties.

2. Internal review and approval

‍The draft is then reviewed by all involved parties. Changes are suggested, discussed, and implemented. The agreement might go through several rounds of revisions before reaching a final version that everyone approves of.

2. Negotiating the terms

‍After the initial draft is complete, there's usually a period of negotiation where the involved parties discuss the terms. This is a critical stage where everyone ensures their interests are adequately represented in the agreement.

Joint venture agreements tend to be high-risk, so it's common for these contract negotiations to be long and drawn out, with different versions shared back and forth until parties reach mutually beneficial terms.

4. Signing the agreement

‍When the document is finalized and approved, it's time for all parties to sign it. This either happens with a wet ink signature on a physical document, or digitally using an electronic signing tool like HelloSign or DocuSign.

The second way is always faster and more efficient because it doesn't require parties to meet up or scan documents to get the contract over the line.

5. Storing the document

‍After the agreement is signed, the document must be stored securely. While some businesses still keep physical copies, many are transitioning to paperless solutions, like cloud services, to keep important documents safe and accessible.

Shared drives like Google Drive, Dropbox, Box and OneDrive are commonly used at this stage.

6. Contract monitoring

‍The terms of the agreement, like financial contributions and divisions, need to be tracked regularly. This is often done using a contract management spreadsheet that's updated regularly. Although, there's a lot of manual data entry involved in this process.

7. Ensuring compliance

‍Regularly reviewing the agreement to ensure everyone is sticking to the rules is crucial. This could involve internal checks or even external audits, requiring a deep dive into financial records and communication logs.

Navigating these steps manually can be challenging, given the potential for human error, the need for clear communication, and the importance of securely handling and storing contracts.

What are the problems with the manual process?

When managed manually, joint venture agreements can present several problems to contract owners:

• ‍Time-consuming process: From drafting to negotiation, signing, and tracking, each stage of managing joint venture agreements manually can be a lengthy process.
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• Risk of human error: With manual data entry and tracking, there's always a chance of errors creeping in, which can lead to miscommunication and potential disputes.
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• Friction when collaborating: Coordinating among multiple parties can be challenging, particularly during the negotiation and review stages, leading to delays and inefficiencies.
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• Security and access issues: Storing physical documents can be risky and accessing them can be cumbersome. While digital storage solutions improve accessibility, they require rigorous management to ensure security and order.‍
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• Inefficient communication: Relying on email for communication can lead to cluttered inboxes, missed updates, and difficulties in tracking past communication.
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• ‍Hard to track compliance: Ensuring all parties adhere to the agreement terms requires constant monitoring, which can be complex and time-consuming when done manually.

Fortunately, there's a way for businesses like yours to streamline and automate the administrative work involved in entering into a joint venture. Let's discuss the alternative now.

How to automate your Joint Venture Agreement template

Juro's all-in-one contract management platform enables individuals and businesses to create, manage and agree contracts faster and more efficiently by safely automating up to 75 per cent of routine contract admin work.

1. Automated contract templates

‍Juro's automated contract templates allow teams to generate joint venture agreements in a matter of seconds. These templates are pre-approved by legal teams, ensuring consistency and accuracy while saving time in the creation of the initial document.

2. Real-time contract collaboration

Juro supports real-time collaboration, allowing multiple parties to review, comment on, and edit the agreement simultaneously - all without leaving their browser.

This feature is particularly useful during the negotiation stage, reducing back-and-forth communication and accelerating the process.

3. Legally binding eSignatures

‍Once the agreement is finalized, all parties can sign it electronically through Juro. Juro's native electronic signature functionality is legally binding, with detailed document records to mark who signed a contract and when.

This not only speeds up the approval process but also ensures that all signatures are securely documented.

4. Cloud-based document storage

Juro provides a secure, cloud-based storage solution for all joint venture agreements. This centralized contract repository makes it easy to access documents anytime, from anywhere, while ensuring they are well-protected.

This is an improvement on simply storing your joint venture agreements on shared drives which can be disorganized and cluttered. Contracts created in Juro are built as structured data, making them easy to find, query and organize. ‍

5. Automated contract tracking

‍With Juro, businesses can automate the tracking of key agreement terms. Juro's data-rich, flexible platform sends out reminders for important milestones, ensuring everyone stays on track with their contractual obligations throughout the relationship.

Automate Joint Venture Agreements with Juro

Dealing with joint venture agreements shouldn't feel like an uphill battle. It should be an exciting time.

With Juro's intuitive contract management software, you can streamline every step of the process, from drafting and negotiation to signing and post-signature contract management.

Get ready to say goodbye to disjointed email chains, cumbersome document storage, and complex tracking systems. Say hello to automated templates, real-time collaboration, secure cloud-based storage, and getting contracts agreed up to ten times faster.

To take the first step towards a simpler, more efficient way of managing your joint venture agreements, book a demo with Juro today and explore how our platform can transform your contract management process.