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How to Write a Joint Venture Business Plan

A joint venture business plan is a document that defines a business arrangement between two or more companies. Just as with a normal business plan, this plan also includes numerous sections and extensively describes the aim, companies, and responsibilities of each company in the joint venture. This plan also outlines temporary activities that help to attain specific goals.

Coming together to form a joint venture is nothing new in the business world. However, the real deal is to have an arrangement that equally protects the interests of each party so that everyone in the joint venture can put their best creative foot forward. Have it in mind that the best way to guarantee all parties understand their obligations and are fully participating is to put together a detailed joint venture business plan .

Although each company in the venture can put together the business plan, a legal review is often recommended to validate if the plan is legitimate. These plans are also known to be above and beyond a standard business plan. Most often, the plans will vary based on the specifics and interests of each party in the arrangement.

Steps to Write a Joint Venture Business Plan

Forming a joint venture involves several critical steps that begin with identifying and analyzing a viable joint venture partner to agree with. This sort of agreement requires well-detailed documentation and other allied/ancillary agreements. To write a solid joint venture business plan, here are steps to take;

Step 1: Write a Detailed Company Profile

Although this wouldn’t be the first page of your joint venture business plan, it is often recommended you start the writing process by first providing a brief description of each company involved in the joint venture. You have to include the management teams of each company, the resources, or goods available, and every other detail vital to the joint venture.

Consider creating a profile to briefly describe the partners in the agreement. You should also outline the expertise of each company and the reason for inclusion in the joint venture. You may also have to write a statement on the purpose of the joint venture as well.

Step 2: Spell Out your Marketing Strategies

The next step will be to discuss the market strategies you intend to leverage to achieve success for the joint venture. Just as with a normal business plan, it needs to define the market the goods and services are meant for. This section will also need to contain a thoroughly done analysis, graphs, and all other vital information that describes the market and why the joint venture will attain success.

Most often, companies in the agreement are advised to cooperate on this section to put together an analysis from each partner. Have in mind that the length and detail of this section will depend on the purpose of the joint venture; a competitive analysis may also be necessary.

Step 3: Input your Financial Projections

Note that every joint venture business plan is expected to include financial projections. While this may be the final section of the business plan, it will include information specific to product prices and cost of goods or services sold, and possible expenses from the activities.

You may need to include Pro forma financial statements in this section. Note that these statements provide a formal look at potential profits and let banks or lenders properly evaluate the venture’s possibility for success. Other statements or documents may also be included in this section.

Step 4: Your Executive Summary

Although the Executive Summary will be the first page of the joint venture business plan, it is always recommended you write it last. This page of your joint venture business plan provides a concise view of the business agreement. Depending on the joint venture activities, the section of the business plan will span anywhere from a few paragraphs to a few pages.

Important Clauses to Include in a Joint Venture Business Plan

A joint venture business plan is the bedrock of any joint venture. It outlines the objective and purpose of the joint venture. Have in mind there are ideal clauses a joint venture agreement is expected to contain. Here are very important clauses that should be inserted in the joint venture business plan:

Definitions

It is critical for every business plan to have a clause that defines all the necessary terms in the plan. This is primarily to avoid any form of misunderstanding and misinterpretation in the plan. Have it in mind that certain words or terms are given confining definitions for the purpose of interpretation of the plan. This clause will help guarantee a mutual understanding between the parties as to what a certain term means.

Parties to the Joint Venture

A joint venture business plan is meant to identify all the parties involved in a joint venture. Have in mind that there is a possibility that the original party won’t be the investing party, and the investing party may be the parent company of the original party. In such circumstances, this clause is very necessary to ensure that the joint venture agreement is binding to the investing parties as well as the original parties.

Nature of the Relationship

This is one of the most vital functions of the joint venture business plan. This clause in a business plan is meant is to outline the nature of the relationship between the joint partners, whether the parties owe any contractual obligations to one another, or whether the arrangement is just a contractual relationship where each party remains at arm’s length.

Business Objectives and Purpose of the Joint Venture

Note that this clause outlines the purpose why the joint venture was established. There are numerous reasons why businesses enter into a joint venture, from expanding their markets to completing a specific project. The purpose of the joint venture will need to be extensively considered before proceeding with finding a joint venture partner.

The Structure of the Joint Venture

This clause will have to include details about what structure the joint venture will be, such as an LLC, LLP, or incorporated. This clause shall also contain the details of the formation of the joint venture thereof. It shall also mention the registered office and the location where the joint venture will be carrying out its business.

Parties’ Contributions

This clause will note if the work will be split 50/50, who’s bringing what to the table, and what you can expect from the other person or company. Outlining this in your joint venture business plan in detail will ensure that all partner’s expectations are aligned. This is to ensure that each party understands what they will be committing to the venture, and also to ensure that they are bound by that commitment.

Distribution of Shares

The shareholding of all the partners will have to be outlined under this clause. Note that the distribution of shares is a very important aspect as the shareholdings will more or less dictate the proportion of ownership among shareholders.

Note that distributions of shares must not be 50:50; they can vary depending on the agreement between all parties. The shares can be distributed by a mutually agreed ratio or based on the capital contribution of the parties.

Rights and Obligations of the Parties

Indeed every party in a joint venture has certain rights that they can exercise and certain obligations. In the joint venture business plan, this clause will have to explain in detail everything that is expected from the parties. This is to limit or avoid future disputes and misunderstandings.

Joint venture business plans will need to explain who will manage the venture and take care of its day-to-day operations. It will also specify different levels of approval for different types of decisions.

Some joint ventures agree to establish a management committee instead of appointing the board of directors where the joint venture has been entered into for a particular short-term project. The mode of management needs to be explicitly outlined in the joint venture business plan.

Representation and Warranties

Note that these are statements of fact made by the parties entering into the joint venture. Representations and warranties are more or less made before entering into an agreement and such representations and warranties will also have to be mentioned in the joint venture business plan.

Representations and warranties are necessary so that the parties have adequate and vital information about each other such as financial standings of the parties or the loans taken by the parties, pending litigation, etc.

Indemnity Clause

Indemnity is a legal obligation on the parties to compensate the other party in case of breach of any contractual obligation. Most often, the party that suffers due to a breach of representations and warranties is entitled to be indemnified for the losses. Have it in mind that the indemnity clause will have to be fair, mutually agreed upon, and well balanced. The language and scope of this clause will also need to be clear and precise.

Dispute Resolution

In all business arrangements, there are bound to have disagreements and issues. While these issues will not always lead to litigation, it is recommended that all parties agree on a mechanism to deal with such situations.

Each party in a joint venture can be from different jurisdictions and governed by varying laws. Therefore the mechanism to resort to in case a dispute arises will need to be mutually agreed upon by the parties and explicitly noted in the plan.

Non-compete clause

This is a very important clause to include in a joint venture business plan. Depending on the nature of the agreement, it might be necessary to note that the two businesses are restricted from directly competing with one another, at least for a stipulated time. However, the non-compete clause will need to be reasonable otherwise it might be treated as a violation of a person’s fundamental right to trade.

Confidentiality

Within a joint venture agreement, parties are expected to disclose certain vital information concerning the company. Note that this information can be related to technology, trade secrets, or intellectual property. The information in the wrong hands might cause the party to incur massive losses.

This is why this clause is very important in a joint venture business plan. The clause may also need to provide that the information disclosed for the joint venture should never be used for personal gains.

Force Majeure

This clause is used to provide relief and protection to a party in a situation where the party is unable to meet some of its obligations. Note that this inability to fulfill obligations may be due to events that are totally beyond the control of the parties. The event could be a flood or an earthquake or a fire so on and so forth.

Termination

You need to understand that not every joint venture survives long and is often terminated. Owing to that, this clause will have to be included in the joint venture business plan. The termination clause centers on instances, breaches, or the occurrence of which the joint venture will be terminated.

Exit Mechanism

Even while still under an agreement, there can be many reasons why the parties would want to exit the joint venture. This could include short of funds or the joint venture going into a loss for some time. It is very common for a party to want out of the joint venture, maybe due to certain unresolved issues. Owing to that, the exit mechanism will need to be noted in the joint venture plan.

Deadlock Resolution

Deadlocks tend to arise when the parties in the joint venture have equal powers and are finding it hard to agree on a common conclusion.

Note that things like this can lead to disagreement especially when neither party is ready or willing to surrender their powers or accept the other party’s decision. While this cannot be entirely avoided in a joint venture, you should establish a mechanism that will help the parties to come to a common agreement or to resolve the deadlock.

Financial and Administrative Record Keeping

All parties in the joint venture must collaborate on maintaining their financial records. They also need to decide the process of administrative record keeping. While this may not be necessary, it is good practice for joint ventures to work with one accounting firm that is agreed upon by all members. This will help to limit the risk of any conflict of interest or complications in the future.

Intellectual Property

For joint ventures that will produce intellectual property that is of potential value to each of the parties, this clause is very necessary to avoid the risk of one party attempting to take advantage of the other’s intellectual property. This clause in the joint venture business plan should note who will own any new intellectual property created by the venture, and the extent to which the parties are permitted to use that property outside the venture.

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Top 7 Joint Venture Templates with Examples and Samples

Samradni Pradhan

Many organizations across the globe fall under the category of a joint venture. A joint venture is an organization where two different organizations' expertise is combined to form something even better. If you want to present your data for the proposal of a joint venture or outline your journey to success, this blog post will outline the top 7 joint venture Templates that are perfect to use. These professionally designed Templates will create a lasting impression on the audience. Whether you are looking for something plain and minimalistic or bright and colorful, we have one for everyone! Let's dive in.

Alternatively, if you want to explore some market entry strategy templates, you can check them out  here !

Template 1: Joint Venture Proposal PowerPoint Presentation Slides

ready-to-use joint venture agreement proposal PowerPoint Template includes all the necessary contents, from introduction to public announcements, to make a great impression on the target audience. You can ensure a clear understanding between you and your partner with detailed explanations of important topics such as negotiation rights and dispute resolutions. Highlight your talent, skills, and personnel to complement each other in a joint venture, and list the roles and responsibilities of partners for a smooth business acquisition process. The actionable organization venture proposal PowerPoint Template states the terms and conditions in case of a dispute between partners. Get access to it today!

Download Now!

Template 2: Joint Venture Successful Strategy Business Template

This Slide is a must-have resource for businesses looking to create successful joint ventures that result in stronger, more innovative products. This PPT Template helps you identify strengths, establish clear communication channels, and build strong employee relationships. By implementing these strategies, businesses can create a culture of collaboration that leads to stronger and more innovative products, ultimately benefiting all parties involved.

Template 3: Proposal for Business Venture PowerPoint Presentation Template

Check out our Proposal for Business Venture PowerPoint Presentation Slide if you're searching for an effective approach to presenting your business venture idea. This Slide is created to assist you in delivering your concept in a clear, concise, and captivating manner. Our slide covers all the necessary information you need to persuade investors, partners, or stakeholders, including market analysis, financial projections, and growth opportunities. Use our presentation Template to leave a lasting impression on your audience and set on the path to success. So don't hesitate; start your pitch today with this Template!

Template 4: Journey to Successful Joint Venture Template

Through this amazing Template, cover your end-to-end journey to starting a successful joint venture. The Slide includes four main categories of information around identifying the right partner, negotiation and agreement on terms, implementation, and management of the joint venture, and continuous evaluation and improvement. You can put in the relevant information of each of these categories to give your audience a comprehensive view on the business.

Template 5: Joint Venture Shareholder Structure PowerPoint Slide Themes

This Template allows you to showcase joint venture business model, including mitigating risks, implementing effective corporate governance, and sharing business returns and risks. It also lets you explain the process of graphically converting your business structure into a joint venture, providing a better understanding of your potential audience. With our Joint Venture Shareholder Structure PowerPoint Slide, discuss the relevance of your shared ownership structure for business growth and build a competitive business model for your entity. So, download our Presentation Design today!

Template 6: Strategic Alliances and Joint Ventures Presentation Template

This Slide is an essential resource for businesses looking to showcase successful strategic alliances and joint ventures. The Template focuses on four main pillars of any successful strategic alliance: leadership, teamwork, innovation, and partnership. By using our Slide, showcase the benefits of these partnerships and demonstrate your ability to create successful alliances that drive business growth.

Template 7: Four Steps of the Journey to a Successful Joint Venture Template

This Slide is a powerful tool that outlines the essential steps required to achieve a successful joint venture. This Slide covers four critical phases businesses must navigate to ensure a prosperous partnership. These steps include identifying the enterprise strategy, investigating partner selection criteria, integrating the company contract shared business plan, and implementing plans to manage employee concerns. With this predesigned Slide, have a clear roadmap that guides you through each step of the journey, helping you to avoid common pitfalls and maximize the benefits of your joint venture. Go ahead and add this Template to your cart!

Template 8: Various Driving Forces for Joint Venture Template

This Slide showcases the key factors that motivate companies to form joint ventures. Our Slide covers a wide range of driving forces, including strategic drivers, resource drivers, technology resources, market drivers, risk drivers, and more. This Slide will help you understand the reasons why companies choose to enter into joint ventures and how these partnerships can benefit both parties involved. Whether you want to create a joint venture or understand this business model, our Various Driving Forces for Joint Venture PowerPoint Slide is an essential resource. Get access to it today!

Template 9: Business Joint Venture Contract Checklist Template

This Slide is a comprehensive and easy-to-follow checklist that outlines all the crucial elements that should be included in a business joint venture contract. With this Slide, have all the information you need in a simple tick-and-cross format where you can gauge the status of tasks. Additionally, a column for comments is given so that you can add any relevant information. This Slide ensures to present your information in an easy-to-understand format. So, take advantage of this valuable resource and get your hands on our Business Joint Venture Contract Checklist PowerPoint Slide today!

EXPLORE THESE JOINT VENTURE TEMPLATES TODAY!

So, next time you have a formal presentation on your joint venture, you must not waste any time designing the Templates. You can use the Templates from the above collection to impress and motivate your stakeholders. Download these premium PPT Slides through our monthly, semi-annual, annual, annual + custom design subscriptions here .

You can also get access to some really amazing business agreement templates  here !

FAQs on Joint Venture

What is a joint venture.

Simply put, a joint venture is one where two or more businesses work together on a specific project or a larger goal. The point of having a joint venture is that it is possible to pool the expertise of multiple resources, their knowledge, and their working style to achieve larger business objectives. These goals may not be achievable when each of these companies works singularly. In a joint venture, the businesses share the project's profits, risks, and losses. Companies often use joint ventures to enter new markets, launch new products or services, or share costs and risks associated with a project. These ventures may be temporary or long-term and can involve businesses of different sizes and industries.

What are the four types of joint ventures?

There are primarily four main types of joint ventures in which businesses may participate:

• An Equity Joint Venture involves companies sharing their resources to create a new entity with collective ownership.
• Businesses sign a contract to collaborate on a specific project or goal in a Contractual Joint Venture.
• A Cooperative Joint Venture sees companies working together to accomplish a mutual objective while still maintaining their individual identities.
• Lastly, a Joint Marketing Venture involves businesses teaming up to advertise and promote their products or services to a larger audience, increasing sales.

Every joint venture type has distinct advantages and disadvantages, so businesses should thoroughly evaluate their objectives and capabilities before committing to any particular type of joint venture.

How can a joint venture be formed?

A joint venture, also known as JV, can be termed as an agreement between two or more parties to establish a distinct legal entity for a specific purpose or project. To form a joint venture, there are various steps that need to be taken.

Firstly, it is necessary to identify potential partners with complementary expertise, skills, and resources to achieve the desired outcome. Next, the objectives and scope of the joint venture must be established, including identifying the project's goals, timelines, resources, and potential risks.

Following this, a legal agreement should be created, which outlines the terms and conditions of the JV, such as the ownership structure, profit-sharing, decision-making process, and exit strategy. Once the legal agreement is in place, the partners should allocate resources according to their contribution to the project, which includes financial, human, and material resources.

Finally, the joint venture can be launched, and the project plan can be implemented. To ensure success, effective communication, and collaboration are essential. It is important to note that forming a joint venture can be a complex process that requires careful planning.

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What Is a Joint Business Plan (JBP)? Benefits & Best Practices

By 8th & Walton | on October 2, 2022

From small businesses to large corporations, the most successful companies begin and stick with a clear business plan. When a company defines its goals, lays out a path to meet objectives, and agrees on financial spending and expectations, it creates a shared vision and accountability to succeed.

Many businesses experience greater growth when partnering with another business. In the supplier and retailer relationship, both parties working independently would be detrimental. To create a mutually beneficial partnership, they must begin by defining each company’s responsibilities, expectations, and needs in a joint business plan.

What Is a Joint Business Plan?

A joint business plan (JBP) is the collaborative process of planning between a retailer and a supplier in which both companies agree on short-term and long-term objectives, financial goals, growth, and shared business initiatives for profitability.

Joint business planning focuses on agreeing on common objectives and aligning on a single goal or set of goals. The companies in the joint business plan must work together to accomplish a shared vision.

What Is the Purpose of a Joint Business Plan?

For retailers and suppliers, having a joint business plan can create a win-win strategy in growing consumer sales. An effective JBP allows suppliers to build stronger relationships with their retailers so both parties can mutually support and benefit from each other.

When a retailer and supplier recognize each others’ needs and agree on common goals, they can share insights to support each other and improve sales, customer growth, and processes.

How Does a Joint Business Plan Work?

Two companies can come together with a joint business plan because they have one thing in common: a shared shopper . Whether it is a supplier partnering with a retailer or a children’s clothing company partnering with a toy manufacturer, having the same target audience is the first element that brings the companies together.

The companies considering a joint business venture should then share their individual business plans and discuss their mutual growth opportunities. This is where the general goals and areas of support can be defined. Specific tactics and category strategies can also be fleshed out in early discussions before moving to the formal process.

Once both companies are in agreement that the partnership will be mutually beneficial, the joint business plan can be created. Formal contracts are drawn up, approved, signed, and the plan is ready to be executed. Periodic reviews and necessary adjustments to the JBP are recommended as needed.

Benefits of Joint Business Planning

Why enter into a joint business plan with another company? The benefits can be not only financial but educational as well:

• Aligning goals.  For a retailer/supplier joint business plan, being aligned on goals creates clarity on all other areas of the business. Defining expectations on all areas from marketing to supply chain to sales goals leaves minimal area for questions. Agreeing on goals, no matter how and when they are measured, keeps both parties accountable and benefits both to meet expectations.
• Shared resources and exposure. Partnering with another company can bring a new audience and a new platform. In a simple retailer/supplier joint business plan, the retailer can introduce the supplier’s product to its core shoppers. At the same time, shoppers loyal to the supplier’s product or brand can be introduced to the retailer’s store and website for the first time.
• Greater return on investment.  By partnering with another company with a shared vision, the benefits above will provide a better ROI when the plan is executed correctly.

Joint Business Planning Best Practices

How can companies ensure their joint business plan is a good fit for both parties? These are some best practices to include in preparation for entering into the partnership:

1. Align Internally First

Before entering into a joint business plan with another company, all members of the business must agree on the benefits of the partnership. Recognizing the advantages and seeing the bigger picture is key. When employees are in alignment within the company, it will be easier to align with the partnering company on the shared vision of the joint business plan.

2. Create the Plan Together

When two businesses enter into a partnership, the joint business plan should not be built by only one. A company sending another a complete plan or just a form to fill out is not collaborative. Both companies need to build the plan from the ground up. Collaborating in the development of the joint business plan is just as important as executing the plan itself.

3. Set Specific Goals

Expectations for success in the partnership need to be specific. “We need to grow sales” or “production costs will decrease” are good goals, but too general. Keep specifics in your plan that are as specific as they are realistic. If one company wants to grow sales by 40% in the next quarter, this should be spelled out in the joint business plan so get early support or push back from the other company.

4. Assign a Metric to Each Goal

Putting a metric with a goal keeps the company accountable to the mission of the joint business plan. For example, if the goal is to grow sales by 40% in the next quarter, it would be wise to assign a weekly growth metric. If the metric is too low over a few weeks, the plan shows that action needs to be taken immediately in order to meet the 40% sales growth goal for the quarter.

5. Communicate Responsibility and Accountability

The joint business plan is the place to eliminate all guesswork. If Company A is responsible for providing labels to Company B, be very specific about the responsible parties. Clarify that the packaging coordinator of Company A will mail the labels to the warehouse manager of Company B on the first of the month.

6. Include Risks and Solutions

Planning for setbacks is key to planning for success. The joint business plan should include any possible risks or obstacles foreseen by either company. Having solutions in place for multiple scenarios makes the plan easier to execute.

7. Constantly Evaluate the Relationship

Joint business plans work better with trust, mutual respect, and a great working relationship. Keeping the relationship healthy between the companies and individuals relying on each other brings more success to the overall plan. Monitor the relationship periodically and work to resolve conflicts as they arise.

Joint Business Plans at Walmart

Walmart works with its suppliers to create plans for sales and category growth. The company relies on suppliers to bring insights to the table to spot trends and get in front of potential gaps in the business.

Back in 2011, Walmart created a joint business plan with Proctor and Gamble to pick up lost sales in air fresheners. This category was down over 2% across the chain, but P&G brought insights to Walmart on how consumers were purchasing throughout the industry.

Consumers had no problem going to Walmart for aerosol sprays for under a dollar, but would then go to specialty stores to purchase expensive candles in the same scent. Through communicating through the joint business plan, Walmart was able to create excitement around higher price-point items and show the shared shopper they could purchase the extra items in one store.

Positive business collaborations can be extremely beneficial in growing retail sales. Two companies sharing a common vision can build on each other’s best practices and support each other to mutually win at the register.

Suppliers looking for support in their Walmart business have found great collaboration with 8th & Walton. Our team of experts supports suppliers to improve reporting, analytics, supply chain, accounting, and more. To begin a great collaboration with us, request a free 15-minute consultation this week.

About the Author

8th & Walton consists of retail industry experts with a combined 200+ years of Walmart and Walmart supplier experience. Having helped hundreds of CPG companies in their efforts to be better supplier partners to the world's most influential retailer, the 8th & Walton editorial team prides itself on being a go-to resource for Walmart supplier news and insights.

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How to Write a Joint Venture Proposal: 5 Effective Tips

Table of Contents

Joint venture proposals can be crucial to your business plan. It allows you to bring together two or more parties for a common purpose and benefit from each other’s expertise. To craft an effective proposal, know what should be included in it and have a clear idea of the goals you want to achieve. This guide on How to Write a Joint Venture Proposal provides practical tips to help you craft a compelling proposal.

What Is a Joint Venture Proposal?

A joint venture proposal is an agreement between multiple business entities to combine their resources and finances to form a new enterprise . This arrangement includes parties sharing the risk, costs, and profits associated with the venture. It also outlines the responsibilities, duties, and obligations of each party. It’s essential to create a clear and comprehensive joint venture proposal that covers all areas related to the venture. This helps you ensure successful execution and satisfaction for all involved.

Why Is a Joint Venture Proposal Important?

A joint venture proposal is important because it outlines the intentions of the businesses planning to combine their resources to achieve a common goal. This proposal should include an analysis of how each business will benefit from the collaboration. It must also discuss what services or products will be provided by each party and any legal considerations that may arise during the process. It serves as a blueprint for the project, which both parties can refer back to when making decisions regarding the execution of the venture. Besides, a joint venture proposal clarifies how funds will be distributed between partners. Thus, it allows all participants to have equitable ownership of the resulting venture. Overall, having such a document ensures smooth collaboration and increases the likelihood of success for the joint venture.

How to Write a Joint Venture Proposal: 5 Key Tips

Below are five essential tips that will help you learn how to write a joint venture proposal that yields positive results:

Research on Your Prospective Partner

Before writing the joint venture proposal, it is vital to research your intended partner. This includes understanding their business, operations, and goals. Doing thorough research helps you better understand what they seek in a joint venture. It will help you craft an appropriate proposal that can be more readily accepted.

Describe the Intended Results

It is essential to explain the expected outcomes of the proposed joint venture. This should include the financial goals, resources available, timeline, and scope of the project. Providing this information upfront will help both parties better understand the potential benefits of working together.

List the Main Details

The proposal should provide clear details about the responsibilities of each party involved in the venture. It must outline any regulations or legal requirements related to the agreement. It should also list any conditions or restrictions that either party needs to agree upon before entering into a contract.

Define the Budget and Action Plans

Describe all steps required to successfully complete the project, including tasks and responsibilities. Also, provide an estimated budget for each stage of the project so that both parties know the costs involved.

Anticipate Questions

Finally, anticipate questions that may arise during the negotiation process and answer them in the proposal. By providing clear answers to potential issues ahead of time, you can expedite the conversation and foster a successful outcome.

Final Words

A joint venture proposal is an important document that outlines the potential of a business partnership. It can help companies use their resources to reach new markets , develop new products and services, or expand their operations. Writing a joint venture proposal requires research, outlining essential details, action plans, and budgets, and anticipating questions. Following the tips outlined, you can create a solid proposal to help your company find the right partner for its objectives.

Abir Ghenaiet

Abir is a data analyst and researcher. Among her interests are artificial intelligence, machine learning, and natural language processing. As a humanitarian and educator, she actively supports women in tech and promotes diversity.

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Legal Templates

Home Business Joint Venture Agreement

Joint Venture Agreement Template

Use our joint venture agreement to create a contract between parties who want to do business together.

Updated December 18, 2023 Written by Sara Hostelley | Reviewed by Brooke Davis

What Is a Joint Venture Agreement?

What to include in a joint venture agreement, characteristics of a joint venture, the benefits and risks of forming a joint venture, how to form a joint venture, joint venture alternatives, joint venture agreement sample.

A joint venture agreement is a written contract outlining the circumstances of two parties pursuing a business activity or project. This agreement details the arrangement between separate entities (often with interrelated strengths) who combine their resources, capital, and expertise to accomplish a common goal.

Instead of creating a formal partnership or new legal entity, a contractual joint venture (JV) allows the parties to continue filing their tax returns separately yet still reap the financial advantages of a partnership , such as sharing resources and risks.

A well-written joint venture agreement clarifies each party’s expectations, responsibilities, and rights relating to the venture.

Is a Joint Venture Agreement Legally Binding?

When both parties execute a joint venture agreement properly, it’s legally binding. If one party doesn’t uphold their end of the agreement, the other party can initiate legal action against them.

Some elements that make this written agreement legally binding include the following:

• Offer and Acceptance: One company asks another to enter into an arrangement and proposes the terms of their collaboration. The parties can negotiate the specific terms but must agree to cooperate.
• Consideration: Each party receives something valuable from the arrangement. For example, one party gains access to a new market, while the other gains access to the first party’s industry expertise.
• Mutuality: Both parties agree to sign an enforceable contract.
• Legality: The entire agreement only contains lawful considerations and promises. For example, the companies agree to work in conditions that align with their jurisdiction’s labor laws.
• Capacity: Each party legally signs the contract. For example, they’ll ensure any representatives have legal authority to sign the document.

It identifies the following fundamental elements:

• Parties or Co-Venturers: The two entities that have agreed to work together.
• Financial Contributions: The amount of money, property, and time each co-venturer will invest.
• Management Structure:  The people responsible for the venture’s day-to-day operations.
• Purpose: The scope of JV activities and the reasons to join resources and collaborate.
• Profits: How the parties will distribute profits, either based on contributions or another formula.
• Term: Whether the venture is for a limited time or indefinite period.
• Assignment: Whether either party can assign their responsibilities to another entity (most documents require prior written consent from the other party).
• Confidentiality: Both parties agree to keep all proprietary information confidential.
• Exclusivity: Whether either party can perform business with other entities outside of the agreement.
• Termination: The conditions under which the joint venture will end.

Joint ventures have a limited life and purpose, requiring less commitment than a more permanent type of partnership that imposes more responsibilities and obligations on each partner.

Here are some defining characteristics of a joint venture:

• Legal Independence: Both entities are legally independent. They only work together to achieve their desired goal.
• Common Goals: Both parties agree to achieve a specific goal that benefits them.
• Shared Resources: Both parties share ownership of the venture assets, liabilities, and implementation. They both contribute resources, but their contributions might be unequal. For example, one party might contribute 60% of the necessary resources while the other party offers the remaining 40%. The parties can allocate profits accordingly.
• Temporary Relationship: The arrangement is usually short-term, ending once the parties reach their established business goal.

Why Else Might a Joint Venture End?

The involved entities might agree to end a joint venture when:

• One company buys the other.
• Market conditions change.
• One company develops new goals.
• The companies’ shared plans don’t apply.
• The companies are taking too long to fulfill their goals.

Explore some of the benefits and risks of forming a joint venture:

• Larger companies can gain access to research materials from newer companies working on innovations.
• Smaller companies can benefit from larger companies’ market presence.
• Domestic companies can learn about the social reality of a local area from a foreign company.
• Foreign companies can gain new relationships and expertise from domestic companies.
• Companies can experiment outside of their core business to develop new products or services.
• Companies can merge their wealth of knowledge in a specific niche.
•  The involved parties may have unclear business objectives if they have poor communication.
•  The parties may experience misunderstandings due to differences in management styles or culture.
•  One party may bring a disproportionate amount of value compared to the other, resulting in an asymmetrical business relationship.
•  The parties may not have the same viewpoints on how to share and distribute profits.

Explore the steps to forming a joint venture so you can decide if this path is right for your existing business:

Step 1 – Find a Suitable Partner

Find a suitable partner who complements your company’s existing structure. For example, suppose your business developed an innovative new product, but you don’t have adequate distribution channels. You might look for a business partner with established channels and a good industry reputation.

Contact different distributions to assess their interest in partnering with you. Ensure you trust the company leaders you choose, evaluating their skills, industry expertise, and cultural fit. When you conduct this due diligence, you can have more confidence in your chosen partner.

Here are some elements to consider about a potential partner:

• The company’s financial situation
• The company’s expectations from the venture
• Other partnerships the company may already have (conflicts of interest)
• The company’s expressed commitment to your proposed goals

Step 2 – Choose a Type of Joint Venture

Once you find a partner, you can negotiate with them to decide on the type of joint venture you’d like to start. Consider the two types:

• Contractual joint venture: A contractual joint venture is a business arrangement you enter with another company in which you both continue to operate separately. You only combine resources to strive toward common goals.
• Equity joint venture: An equity joint venture is a business arrangement in which you and another company create a new entity under which you conduct business. Each party will hold equity in the new company, and the new company will operate separately from the two parties’ businesses.

Creating a separate legal entity is more complex and expensive, but it can offer more legal protection if an issue arises. A simple contractual agreement allows for more flexibility, as the parties don’t have to pay taxes and report profits for an entirely new entity. Instead, the profits flow through to each party’s business.

Step 3 – Draft a Joint Venture Agreement

Use our joint venture agreement template to start drafting your own document. Tailor it to your and your partner’s needs and preferences. Negotiate with the other party to ensure you detail mutually beneficial terms.

While drafting and signing this document, you should have legal representation for each party. A third party with legal knowledge for each entity can ensure the document is fair and legally enforceable.

Step 4 – Pay Taxes

No matter what kind of profit-seeking business you have, you must pay your share of taxes. The same applies to owners of joint ventures. The taxes you pay for your joint venture will depend on how you structure your arrangement.

If you and your partner create a separate entity, all its profits will be subject to taxation based on the business type. For example, C corporations pay a tax rate of 21% on profits they earn. Alternatively, limited liability companies (LLCs) account for business losses and income on each owner’s individual tax return.

Contractual joint ventures don’t file their own tax returns. Instead, their tax responsibilities flow to each party’s respective entity.

Step 5 – Abide by Other Regulations

Ensure you abide by federal, state, and local laws for your joint venture’s activities. For example, if you plan to use the labor of another entity’s employees as part of your joint venture agreement, you must follow applicable labor laws.

You might also need to acquire a business license or permit to legally operate, depending on the industry to which your joint venture belongs.

Here are some alternatives to a joint venture you may consider:

Partnerships

A partnership is a business structure in which two or more parties lead a company together. They share the business’s profits and losses. It lasts indefinitely, unlike a joint venture that usually has an end date.

The main similarity between a partnership and a joint venture is that each party often shares liability if something goes wrong.

A franchise is when a parent company grants an individual the right to operate a business using the parent company’s brand and approaches. Some examples include Dunkin Donuts, Ace Hardware, and The UPS Store.

The business purchasing the franchise pays a fee to the franchisor to obtain operating rights. The franchisor will maintain some control over how the franchisee conducts their business. Alternatively, neither party is in complete control in a joint venture, as both contribute their ideas and resources toward a common goal.

Licensing involves a licensee obtaining the right to use a company’s intellectual property to perform services to make products.

It’s similar to franchising but offers more freedom to the licensee, as the licensor doesn’t have much control over how the licensee conducts their business.

Mergers/Acquisitions

A merger occurs when two companies unite to become one entity. It takes place when two companies of similar size mutually agree to come together. They remain one entity for an indefinite period.

An acquisition occurs when a larger company assumes a smaller company’s assets. A larger company performs an acquisition when it has the resources to buy out a smaller business.

Download a joint venture agreement template as a PDF or Word file below:

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• Business Purchase Agreement : A legally enforceable contract that documents the sale of a business.
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Joint Venture Business Plan Template

Download this Joint Venture Business Plan Template Design in Word, Google Docs, Apple Pages Format. Easily Editable, Printable, Downloadable.

If you plan to enter into a joint venture, you want to make sure that both parties will benefit from the partnership. Set the right objectives for this business partnership with our Joint Venture Business Plan Template. Make your business grow with the help of a partnership that’s mutually rewarding. This template will give you the option to alter any of its content to fit your specifics. You can also edit it using different editing programs and download it on your PC or mobile devices. Stop wasting time, and start making the best out of it by downloading this Joint Venture Business Plan template now!

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Joint Venture (JV): What Is It, and Why Do Companies Form One?

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

What Is a Joint Venture (JV)?

A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity.

Each of the participants in a joint venture is responsible for profits , losses, and costs associated with it. However, the venture is its own entity, separate from the participants’ other business interests.

Key Takeaways

• In a joint venture (JV), two or more businesses decide to combine their resources in order to fulfill an enumerated goal.
• They are a partnership in the colloquial sense of the word, but can take on any legal structure.
• A common use of JVs is to partner up with a local business to enter a foreign market.

Sydney Burns / Investopedia

Understanding a Joint Venture (JV)

Although a joint venture is a partnership in the colloquial sense of the word, it can be formed using any legal structure—corporations, partnerships, limited liability companies (LLCs) , and other business entities can all be employed.

Despite the fact that the purpose of a JV is typically for production or research, one can also be formed for a continuing purpose. JVs can combine large and small companies to take on one or several projects and deals.

Here are the four main reasons why companies form JVs.

1. To Leverage Resources

A joint venture can take advantage of the combined resources of both companies to achieve the goal of the venture. One company might have a well-established manufacturing process, while the other company might have superior distribution channels.

2. To Reduce Costs

By using economies of scale , both companies in the joint venture can leverage their production at a lower per-unit cost than they would separately. This is particularly appropriate with technology advances that are costly to implement. Other cost savings as a result of a JV can include sharing advertising or labor costs.

3. To Combine Expertise

Two companies or parties forming a joint venture might each have different backgrounds, skill sets, or expertise. When these are combined through a JV, each company can benefit from the other’s talent.

4. To Enter Foreign Markets

Another common use of joint ventures is to partner with a local business to enter a foreign market. A company that wants to expand its distribution network to new countries can enter into a JV agreement to supply products to a local business, thus benefiting from an already-existing distribution network. Some countries have restrictions on foreigners entering their market, making a JV with a local entity almost the only way to do business in the country.

Image by Sabrina Jiang © Investopedia 2020

How to Set Up a Joint Venture

Regardless of the joint venture structure, the most important document will be the agreement that sets out all of the rights and obligations of each party to the venture. The objectives, the initial contributions of the parties, the day-to-day operations, the right to the profits, and the responsibility for losses are all set out in the JV agreement. It is important to draft it with care to avoid risking litigation down the road.

Pros and Cons of a Joint Venture

A joint venture gives each party the opportunity to exploit a new business opportunity without bearing all of the cost and risk. Joint ventures, by nature, are riskier than “business as usual,” and coopetition and sharing the risk is a wise move.

If the right participants are involved, the joint venture also starts out with a broader base of knowledge and pool of talent than any one party possesses on its own. For example, a joint entertainment venture set up by an animation studio and a streaming content provider can get off the ground quicker—and probably with a better chance of success—than either participant could alone.

Embarking on a joint venture requires relinquishing a degree of control. The vital decisions are being made by two or more parties.

The companies involved must go into the project with the same goals and an equal degree of commitment.

Extreme differences between the participants’ company cultures and management styles can be a barrier to success. Will the executives of an animation studio be able to communicate in the same language as the executives of a digital streaming giant? They might, or they might line up in opposing camps.

Setting up a joint venture multiplies the number of management teams involved. If one party undergoes a significant change in its business structure or executive team, the joint venture can get lost in the shuffle.

Paying Taxes on a Joint Venture

When forming a joint venture, the most common thing the two parties can do is to set up a new entity. As the JV itself isn’t recognized by the Internal Revenue Service (IRS), the business form between the two parties helps determine how taxes are paid.

As the JV is a separate entity, it will pay taxes as any other business or corporation does. However, if it chooses to operate as an LLC, its profits and losses would pass through to the owners’ personal tax returns, as with any other LLC.

The JV agreement will spell out how profits or losses are taxed. If the agreement is merely a contractual relationship between the two parties, then it will determine how the tax is divided up between them.

Joint Ventures vs. Partnerships and Consortiums

A joint venture is not a partnership. That term is reserved for a single business entity that is formed by two or more people. JVs join two or more different entities into a new one, which may or may not be a partnership.

The term “ consortium ” is sometimes used to describe a JV, and there are similarities. However, a consortium is a more informal agreement than a JV. For example, a consortium of travel agencies can negotiate and give members special rates on hotels and airfares, but it does not create a whole new entity. The agencies still pursue their own businesses independently. In a JV, they would share ownership of the created entity, jointly responsible for its risks, profits, losses, and governance.

Examples of Joint Ventures (JVs)

Once the joint venture has reached its goal, it can be liquidated like any other business or sold. For example, in 2016, Microsoft Corp. sold its 50% stake in Caradigm, a JV it had created in 2011 with General Electric Co.

The JV was established to integrate Microsoft’s Amalga enterprise healthcare data and intelligence system, along with a variety of technologies from GE HealthCare. Microsoft has now sold its stake to GE, effectively ending the JV. GE has become the sole owner of the company and is free to carry on the business as it pleases.

Sony Ericsson is another famous example of a JV between two large companies. In this case, they partnered in the early 2000s with the aim of being a world leader in mobile phones. After several years of operating as a JV, the venture eventually became solely owned by Sony.

Why Would a Firm Enter Into a Joint Venture?

There are many reasons to join forces with another company on a temporary basis, including for purposes of expansion, development of new products, and entering new markets (particularly overseas).

Joint ventures are a common method of combining the business prowess, industry expertise, and personnel of two otherwise unrelated companies. This type of partnership allows each participating company an opportunity to scale its resources to complete a specific project or goal while reducing total cost and spreading out the risks and liabilities inherent to the task.

What Are the Primary Advantages of Forming a Joint Venture?

A joint venture affords each party access to the resources of the other participant(s) without having to spend excessive amounts of capital. Each company is able to maintain its own identity and can easily return to normal business operations once the JV is complete. JVs also provide the benefit of shared risk.

What Are Some Disadvantages of Forming a Joint Venture?

Joint venture contracts commonly limit the outside activities of participant companies while the project is in progress. Each company involved in a JV may be required to sign exclusivity agreements or a  non-compete agreement  that affects current relationships with  vendors  or other business contacts.

The contract under which a JV is created may also expose each company to liability inherent to a partnership unless a separate business entity is established for the JV. Furthermore, while companies participating in a JV share control, work activities and use of resources are not always divided equally.

Does a Joint Venture Need an Exit Strategy?

A joint venture is intended to meet a particular project with specific goals, so it ends when the project is complete. An exit strategy is important, as it provides a clear path on how to dissolve the joint business, avoiding drawn-out discussions, costly legal battles, unfair practices, negative impacts on customers, and controlling for any possible financial loss.

In most JVs, an exit strategy can come in three different forms: sale of the new business, a spinoff of operations, or employee ownership. Each exit strategy offers different advantages to partners in the JV, as well as the potential for conflict.

The Bottom Line

A joint venture between companies can open the way for expansion into a new line of business by each participant at a relatively modest cost. In fact, it sounds ideal: Each company contributes its own expertise, but the cost of the venture is split among them.

It’s only ideal, though, if the companies have a shared vision and an equal commitment to the success of the joint venture.

Internal Revenue Service. “ Tax Information for Partnerships .”

Microsoft. “ Microsoft and GE Healthcare Complete Joint Venture Agreement .”

Business Wire. “ Caradigm Names Neal Singh CEO .”

GE HealthCare. “ GE, Microsoft to Launch Joint Venture Aimed at Global Healthcare System Transformation .”

Sony. “ Sony and Ericsson Complete Joint Venture Agreement .”

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Joint Venture Agreement Template

Understanding a joint venture agreement.

Smart business owners looking for opportunities to expand their streams of income will be on the lookout for opportunities that lead to growth and profitability. With some of the various growth strategies available, joint venture agreements are worth considering if a company wants to obtain a tactical and strategic edge in the market.

Even though joint ventures are usually dealt with by large corporations with large economies of scale, they can be effectively used by small business owners if done under the right circumstances.

A joint venture can occur in many forms. By the widest definition, it can mean a strategic agreement made by two or more organizations to work together by combining a pool of resources to complete a specific project.

Engaging in joint ventures is not always a bed of roses. They can pose significant business risks to both parties in terms of liabilities and possible conflicts. As each party depends on the other in protecting their goodwill, it is vital for the joint venture to establish their obligated roles and responsibilities, and how they can collaborate to reach their goals. These elements are what mainly entails a joint venture agreement

What Is a Joint Venture Agreement?

A joint venture Agreement, also known as a co-venture agreement, is a temporary business arrangement involving two or more parties that decide to pool resources and achieve a specific goal.

Contrary to business entities such as partnerships or limited liability companies, a joint venture is just a temporary enterprise that brings together two or more established businesses willing to work together to complete a certain task. This could be a new project or typically any other business activity.

Usually, joint venture agreements are created for a limited period of time. They are created by simply committing to a contract laid out by another business or party, without the application of a formal state or federal filing.

Being that they are temporary associates, joint venture participants share risks and rewards. The venture is made to be its own entity but is separate from the business interests of other parties. Under a joint venture, the parties to the agreement contribute their resources, which are including but not limited to cash, capital, assets, personnel, facilities, physical equipment, property assets, or intellectual property such as patents, trademarks, or any other form of intellectual property.

Businesses form joint ventures for a variety of reasons. It could be to expand market share, launch new product developments, amongst other reasons. Although a joint venture shares similar characteristics with a partnership, which requires a partnership agreement , the major difference separating these two concepts is the time period dedicated to each. A joint venture pertains to a single business transaction conducted over a limited period of time. On the other hand, partnerships are established for long-term business relationships. Another similar and popular type of contract to take note of is a teaming agreement , which is a legally binding contract between two or more parties that is used to regulate the rights and obligations when pursuing a contract with a third party.

These strategic partnerships provide unique benefits to partners. Even as each participant is responsible for profits, losses, and operating costs, they prove to be quite beneficial to each party involved. Businesses can increase their resources, improve their capabilities and technical expertise, and penetrate new markets and distribution channels. However, sparking the right relationship can be difficult and might require meaningful time and effort.

Types of Joint Ventures

Joint ventures can be formed according to the circumstances of each case, bringing businesses that have the intention of achieving a common goal together. With every type of joint venture undertaken, it presents a platform where businesses can analyze and assess their level of collaboration and open opportunities for future collaboration. There are 4 main types of joint ventures. They include:

Project Joint Venture

Project joint ventures are the most common type of joint ventures undertaken. Bound by time and purpose, these joint ventures involve companies entering into agreements to achieve a certain task. Mainly, companies enter into project-based joint ventures to execute a specific project or offer a particular service together.

Functional Joint Venture

Functional joint ventures are dedicated to companies that come together to share their expertise and create a symbiotic environment that will help these companies benefit from each other's business functions.

Vertical Joint Venture

Vertical joint ventures occur between businesses in the same supply chain. They are carried out when bilateral trading does not make financial sense. The terms of this joint venture result in suppliers reaching maximum gains while buyers reach limited gains. Ultimately, this arrangement helps solidify the relationship between the buyer and seller which sees quality products and services being produced to clients at reasonable prices.

Horizontal Joint Venture

Horizontal joint ventures occur when companies in the same general line of business transact with each other to sell to their customers or create a product that can be consumed by the same group of customers. Businesses that join forces and produce the same goods or services can open new markets in different geographical regions. A local company that has better expertise and has an established distribution network can go into a horizontal joint venture with a foreign company that has economies of scale.

Important Elements of a Joint Venture

Joint venture agreement templates are designed to provide all necessary information that explains the basic terms of the agreement. Business-in-a-Box provides many joint venture agreement templates that will help anyone interested to know what the entire agreement terms comprise of.

In a nutshell, a joint venture agreement should contain:

• The formation of the venture
• The names of the signees
• The purpose of the agreement
• All parties’ contributions
• The profit distribution
• The management set up
• Parties responsibilities
• No-exclusivity clause
• Terms of the agreement
• Termination details
• Confidentiality requirements
• A clause for further action
• Assignment and transfer of rights
• Governing laws and regulations
• Terms of severability
• Handling of notices

A concession is reached between two or more businesses and is bound together to pursue business and achieve a particular goal.

Joint Control

A joint venture agreement, also known as a co-venture agreement, involves business participants who share control over business assets and operation.

Pooling Resources and Knowledge

Businesses leverage a pool of resources and technical experience including capital, time, assets, experienced personnel, and technical know-how, which all contribute to large-scale production.

Sharing Profits and Losses

A joint venture contract must stipulate a provision based on the agreed ratio sharing of profit and loss. At the end of a venture, the parties share the computed financial and intangible profits and losses. In instances where the joint ventures continue to last for a significantly longer duration, the profit and losses are calculated annually.

Access to Efficient Technology and Standards

When businesses enter joint ventures, they are exposed to new tactics of production, marketing techniques and new business experience, which reduces the overall cost while also improving quality.

Rights Upon Dissolution

When the joint venture achieves success, it comes a time to terminate the agreement by settling the accounts of the parties in a process called dissolution. The businesses have the liberty to conduct their own business unless otherwise stated in the joint venture agreement during the life of the joint venture.

Additional and Crucial Details Required in a Joint Venture Agreement

The first section shows when the agreement was made and acts as proof of all members agreeing to join hands and form the legal entity. It also explains the definitions and interpretations of words and expressions throughout the joint venture agreement document.

This section is mandatory as it provides the name which the parties are involved in the agreement. The names should accompany a short description describing what the company is about, its operations and what it would provide in the joint venture.

The objectives of a joint venture should portray what your joint venture agreement is all about. A joint venture that does not have solid and clear objectives has already failed even before the initiative kicked off.

Contributions

The contributions that each party makes are taken down for future reference. Contributions are a description of the form of capital, assets, or manpower that would be involved in achieving the goals of a joint venture.

Project Costs, Profit and Loss Distribution

The costs and expenses incurred by each party are usually reimbursed according to what the members agreed in the joint venture agreement. In this section, the sharing of profit and losses is completed at the end of the contract period and the closure of all the activities.

All joint venture agreement templates need to explain the management procedures and also provide solutions to any issues or problems which may arise throughout the joint venture.

Responsibilities

This section of the Joint Venture Agreement template ensures the success of both parties will be arrived at after all parties agree on how to run the venture. The responsibilities and limitations provided to each partner define who will be in charge of a specific activity.

No-Exclusivity Clause

This section of the joint ventures agreement template guides the partners to engage in activities that are in accordance with the terms and conditions of the agreement.

Terms of Agreement

This section of the joint ventures agreement template gives each member responsibilities to fulfil certain obligations as agreed in the contract with other members in accordance with the terms of the contract.

Termination Details

Here, upon completion of the project or early termination of the contract, each member is entitled to receive an amount equal to the one initially provided towards any funds that have not yet been expended.

Confidentiality Requirements

In this section of the joint venture agreement template, the parties have to agree to keep secret all the information which are labelled as confidential information or is considered preferable to remain secret according to the joint venture agreement. This section guides the parties to not use sensitive information for any purpose except in a way that is acceptable in accordance with the agreement.

In this section of the joint ventures agreement template, members are awarded rights and obligations which control how they undertake business operations.

Governing Laws and Regulations

In this section of the joint venture agreement template, this Agreement shall be administered in accordance with the laws and jurisdiction of the area the business will be taking place.

Terms of Severability

This section of the joint venture agreement template provides power to allow the remaining provisions of this agreement to be in full effect if it has been held invalid, illegal, or unenforceable.

Here in this section, it enforces all notices, demands, requests, and other communications under the Joint Agreement to be done in writing and to be regarded duly given, unless purposely pointed out to the contrary in this agreement.

When You Should Use a Joint Venture Agreement

A joint venture agreement is needed when you decide to form a joint venture, including:

• Business expansion
• Development of new products
• Moving a business into new markets (especially overseas)

You may have innovative ideas for your business, and your company may have strong potential for growth, but a joint venture could seriously solidify the benefits even further. A joint venture agreement could give you:

• Access to established markets and distribution channels
• Increased technical expertise
• Additional resources
• Greater capacity

Terminating a Joint Venture Agreement

It’s not difficult to end a joint venture if you addressed any key issues beforehand. A joint venture agreement can include termination conditions, and if so, these conditions would be followed when entering the termination period. Another alternative is to buy your partner out.

When you’re preparing your joint venture agreement, make sure to explain what will happen should the joint venture be terminated. Such information can include:

• How shared intellectual property will be divided
• How to continue to protect confidential information
• Who will be entitled to any future income from the joint venture's activities
• Who will be responsible for any continuing liabilities, including debts and guarantees given to clients or customers

No matter how well prepared your agreement is, issues will still arise. Properly planning and negotiating these details in the agreement beforehand will allow for an amicable termination, where the parties can continue to trust each other, even after the agreement ends.

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Real Estate Joint Venture Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Real Estate Sector

A real estate joint venture business is a business that involves two or more real estate businesses pooling their resources and expertise to achieve a particular goal or develop a real estate project. In a Joint venture business, the risks and rewards of the enterprise are also shared.

The joint venture business model allows real estate operators (individuals with extensive experience managing real estate projects) to work with real estate capital providers (entities that can supply capital for a real estate project).

Please note that real estate joint venture businesses are not taxed because profits made from a joint venture flow through to the individual members of the venture, the portion of the profit that each member receives is claimed on that member’s individual or corporate tax returns. The venture itself does not make a tax filing on any of the funds that flow through it.

Steps to Write a Real Estate Joint Venture Business Plan

Executive summary.

King’s Signature® Real Estate Group, Inc. is a standard and registered real estate joint venture that will be located in Miami, Florida but with an active presence and network all across major cities in the United States and the globe.

We have been able to secure all the necessary permits and licenses required for us to participate in real estate projects in different countries of the world. King’s Signature® Real Estate Group, Inc. is made up of two thriving real estate companies in the United States of America.

Emmanuel Morgan and Austin Tyler are the founders of King’s Signature® Real Estate Group, Inc.

Company Profile

A. our products and services.

King’s Signature® Real Estate Group, Inc. will be involved in;

• Houses and housing estate developments
• Apartments and other residential developments
• Commercial developments
• Industrial developments
• Other developments (Investment Properties)
• Real estate consultancy and advisory services

b. Nature of the Business

King’s Signature® Real Estate Group, Inc. will set up the Real Estate project as an independent limited liability company (LLC).

The parties sign the joint venture agreement, which details the conditions of the joint venture such as its objective, the contribution of the capital member, how profits will be split, a delegation of management responsibilities for the project, ownership rights of the project, etc.

Please note that a real estate joint venture is not limited to an LLC. Corporations, partnerships, and several other business arrangements can all be used to set up a joint venture. The exact structure of the JV determines the relationship between the operator and the capital provider.

c. The Industry

King’s Signature® Real Estate Group, Inc. will operate in the real estate sales and brokerage industry.

d. Mission Statement

Our mission is to be at the forefront of buying property and partnering with landowners, then develop a plan for what to build or rebuild on that property. We will bring in investors and predict how much money the new homes or businesses will bring in.

e. Vision Statement

Our vision of to be listed among the top three real estate joint venture companies in the United States of America.

f. Our Tagline (Slogan)

King’s Signature® Real Estate Group, Inc. – Your Reliable and Trusted Real Estate Company!

g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)

King’s Signature® Real Estate Group, Inc. will be formed as a Limited Liability Company (LLC). Under this arrangement, each member of the joint venture is liable for profits and losses relating to the business. However, this liability only extends as far as the project for which the joint venture was created.

h. Our Organizational Structure

• Chief Executive Officer
• Project Manager
• Company’s Lawyer/Secretary
• Admin and HR Manager
• Head of Construction and Renovation
• Business Developer/Sales and Marketing
• Customer Service Executive / Front Desk Officer

i. Ownership/Shareholder Structure and Board Members

• Emmanuel Morgan (Founder and Chief Executive Officer) 35 Percent Shares
• Austin Tyler (Co-Founder and Chief Operating Officer) 35 Percent Shares
• Harrison Williams (Director) 10 Percent Shares
• Charles Abraham (Director) 10 Percent Shares
• Stella Norman (Board Member and Secretary) 10 Percent Shares.

SWOT Analysis

A. strength.

• Managing partners bring industry expertise and put time and effort to manage the project, while limited partners provide the capital required to fund the project.
• Ideal location for property development (thriving real estate market)
• Access to finance from business partners
• Robust relations with property owners and properties investment moguls
• Good returns on investment for investors.

b. Weakness

• A new business that will be competing with well-established property developers and other real estate joint venture companies
• Inability to retain our highly experienced and qualified employees longer than we want

c. Opportunities

• Miami, Florida is a thriving market for property development companies and the real estate industry.
• Good support structure for real estate joint venture companies.

i. How Big is the Industry?

The market size of the real estate sales and brokerage industry that real estate joint venture business is a subset of was put at $156.2 billion in 2021 hence it will be safe to safe the industry is amongst the biggest industries in the United States of America.

ii. Is the Industry Growing or Declining?

Beyond every reasonable doubt, all available data points to the fact that the real estate and brokerage industry is growing. The market size of the industry is expected to increase by 0.4 percent in 2021.

iii. What are the Future Trends in the Industry

The real estate sales and brokerage industry cum real estate joint venture line of business are changing, and players in the industry are improvising. No doubt, technology and climate change (the go green initiative) will change the landscape of the real estate sales and brokerage industry going forward.

iv. Are There Existing Niches in the Industry?

No, there is no existing niche idea when it comes to real estate joint venture business. This is so because the real estate joint venture line of business is a subset of the real estate and brokerage industry.

v. Can You Sell a Franchise of your Business in the Future?

King’s Signature® Real Estate Group, Inc. has no plans to sell franchises in the nearest future but we will open our doors to accommodate more partners and investors in the nearest future.

• The arrival of new real estate companies within our market space
• Unfavorable government policy and regulations
• Community resistance
• Liability problems
• Continuously changing consumer demands especially as it relates to style and design of properties et al.

i. Who are the Major Competitors?

• White Star Real Estate
• New World Development Co. Ltd
• Wheelock and Company
• AvalonBay Communities
• Greystar Real Estate Partners
• Wood Partners
• Mill Creek Residential
• Continental Properties Company, Inc.
• Trammell Crow Company
• The JBG Companies
• Lowe Enterprises
• Simon Property Group
• General Growth Properties
• Kimco Realty Corp
• The Allen Group
• Panattoni Development Co.
• McDonald Development Co.
• USAA Real Estate Co.
• LaSalle Investment Management
• Gibraltar Syndication & Development Company

ii. Is There a Franchise for Real Estate Joint Venture Business?

Well, for now, there are no known franchise opportunities for the real estate joint venture business.

iii. Are There Policies, Regulations, or Zoning Laws Affecting Real Estate Joint Venture Business?

Yes, there are county or state regulations and zoning laws for the real estate joint venture business, and players in this industry are expected to work with the existing regulations governing such business in the county or state where their business is domiciled.

Zoning laws are found in virtually every municipality in the United States, affecting land use, lot size, building heights, density, setbacks, and other aspects of property use.

Marketing Plan

A. who is your target audience.

i. Age Range

Our target market comprises adults above 18 years who have the finance to do business with us.

ii. Level of Educational

We don’t have any restrictions on the level of education of those who we are ready to work with as investors or buyers of the properties we develop.

iii. Income Level

The income level of those we are looking to do business with will be between $70,000 and above $124,000.

iv. Ethnicity

There is no restriction when it comes to the ethnicity of the people we are looking forward to partnering with.

v. Language

There is no restriction when it comes to the language spoken by the people we are looking forward to partnering with.

vi. Geographical Location

Anybody from any geographical location will be welcome to partner with us or do business with our company.

vii. Lifestyle

King’s Signature® Real Estate Group, Inc. will not restrict any investor or client from partnering with us or doing business with us based on their lifestyle, culture, or race.

b. Advertising and Promotion Strategies

• Host Themed Events That Catch Attention.
• Tap Into Text Marketing.
• Make Use of Bill Boards.
• Share Your Events in Local Groups and Pages.
• Turn Your Social Media Channels into a Resource
• Develop Your Business Directory Profiles
• Build Relationships with players in the real estate and brokerage industry.

i. Traditional Marketing Strategies

• Marketing through Direct Mail.
• Print Media Marketing – Newspapers & Magazines.
• Broadcast Marketing -Television & Radio Channels.
• OOH, Marketing – Public Transits like Buses and Trains, Billboards, Street shows, and Cabs.
• Leverage direct sales, direct mail (postcards, brochures, letters, fliers), print advertising (coupon books, billboards), and referral (also known as word-of-mouth marketing).

ii. Digital Marketing Strategies

• Social Media Marketing Platforms.
• Influencer Marketing.
• Email Marketing.
• Content Marketing.
• Search Engine Optimization (SEO) Marketing.
• Affiliate Marketing
• Mobile Marketing.

iii. Social Media Marketing Plan

• Start using chatbots.
• Create a personalized experience for our customers.
• Create an efficient content marketing strategy.
• Create a community for our target market and potential target market.
• Gear up our profiles with a diverse content strategy.
• Use brand advocates.
• Create profiles on the relevant social media channels.
• Run cross-channel campaigns.

c. Pricing Strategy

When working out our pricing strategy, King’s Signature® Real Estate Group, Inc. will make sure it covers profits, insurance, premium, license, and economy or value and full package for each property. All our pricing strategies will reflect;

• Cost-Based Pricing
• Value-Based Pricing
• Competition-Based Pricing.

Sales and Distribution Plan

A. sales channels.

Our channel sales strategy will involve using partners and third parties—such as referral partners, affiliate partners, strategic alliances in the real estate and brokerage industry, and freelancers to help refer clients to us.

King’s Signature® Real Estate Group, Inc. will also leverage the 4 Ps of marketing which are place, price, product, and promotion. By carefully integrating all these marketing strategies into a marketing mix, we can have visible, in-demand properties that are competitively priced for our customers.

b. Inventory Strategy

The fact that we will need the required building materials means that King’s Signature® Real Estate Group, Inc. will operate an inventory strategy that is based on a day-to-day methodology for ordering, maintaining, and processing items in our warehouse.

We will develop our strategy with the same thoroughness and attention to detail as we would if we were creating an overall strategy for the business.

c. Payment Options for Customers

Here are the payment options that King’s Signature® Real Estate Group, Inc. will make available to her clients;

• Payment via bank transfer
• Payment via credit cards
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

d. Return Policy, Incentives, and Guarantees

At King’s Signature® Real Estate Group, Inc., we buy and develop properties, and the nature of the products (properties) we offer does not accommodate a return policy, but we will guarantee our investors of good returns on their investment (ROI).

e. Customer Support Strategy

Our customer support strategy will involve seeking customer feedback. This will help us provide excellent properties, return on investment (ROI), and customer service to our clients and investors. We will work with effective CRM software to be able to achieve this.

Regularly, we will work towards strengthening our Customer Service Team and also Leverage Multi-Channel Servicing as part of our customer support strategy.

Operational Plan

We plan to expand our revenue by 50 percent in the second year and the plan will include a marketing, sales, and operations component. The operations component of the plan would include attracting investors that will enable the firm to boost our properties and service offerings and support revenue growth.

a. What Happens During a Typical Day at a Real Estate Joint Venture Business?

• The office is open for the day
• Documentation and other administrative works are conducted throughout the day
• Marketers go out to market our properties and services
• If there is an ongoing property development project, the required team and machinery are sent to the field to carry out the project.
• The team and machinery return to base (office) after the day’s job
• The report for the day is written and submitted to the required authority
• The office is closed for the day.

b. Production Process

There is no production process when it comes to real estate joint venture business except for the construction of properties.

c. Service Procedure

No, there are no defined service procedures for a real estate joint venture business.

d. The Supply Chain

King’s Signature® Real Estate Group, Inc. will rely on key players in the real estate and brokerage industry to refer business deals to us. So also, we have been able to establish business relationships with wholesale supplies of building materials et al.

e. Sources of Income

King’s Signature® Real Estate Group, Inc. makes money from;

Financial Plan

A. amount needed to start your real estate joint venture business.

King’s Signature® Real Estate Group, Inc. would need an estimate of $4.5 million to successfully set up our real estate joint venture business in the United States of America. Please note that this amount includes the salaries of all our staff for the first month of operation.

b. What are the Costs Involved?

• Business Registration Fees – $750.
• Legal expenses for obtaining licenses and permits – $7,300.
• Marketing, Branding and Promotions – $5,000.
• Business Consultant Fee – $2,500.
• Insurance – $5,400.
• Rent/Lease – $200,000.
• Other start-up expenses include commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
• Operational Cost (salaries of employees, payments of bills et al) – $100,000
• Start-up Inventory – $15,000
• Store Equipment (cash register, security, ventilation, signage) – $4,750
• Furnishing and Equipping – $80,000
• Liquid Cash for Execution of Projects: $3.5 million
• Website: $600
• Miscellaneous: $2,000

c. Do You Need to Build a Facility? If YES, How Much will it cost?

King’s Signature® Real Estate Group, Inc. will not build a new facility for our real estate joint venture business; we intend to start with a long-term lease and after 5 years, we will start the process of acquiring our own facility.

d. What are the Ongoing Expenses for Running a Real Estate Joint Venture Business?

• Transportation cost
• Cost of building materials and supplies
• Utility bills (internet, phone bills, signage and sewage et al)
• Salaries of employees

e. What is the Average Salary of your Staff?

• Chief Executive Officer – $85,000 Per Year
• Project Manager – $72,000 Per Year
• Head of Construction and Renovation – $70,000 Per Year
• Company’s Lawyer/Secretary – $68,000 Per Year
• Admin and HR Manager – $45,000 Per Year
• Business Developer / Sales and Marketing – $42,000 Per Year
• Accountant – $40,000 Per Year
• Customer Service Executive / Front Desk Officer – $30,000 Per Year.

f. How Do You Get Funding to Start a Real Estate Joint Venture Business

• Raising money from personal savings and sale of personal stocks and properties
• Raising money from investors and business partners
• Sell shares to interested investors
• Applying for a loan from your bank/banks.

Financial Projection

A. how much should you charge for your product/service.

At King’s Signature® Real Estate Group, Inc. our fee will be based on the location and type of property we want to develop.

b. Sales Forecast?

• First Fiscal Year (FY1): $3.5 million
• Second Fiscal Year (FY2): $5 million
• Third Fiscal Year (FY3): $9 million

c. Estimated Profit You Will Make a Year?

The ideal profit margin we hope to make at King’s Signature® Real Estate Group, Inc. will be between 16 and 20 percent on development costs.

d. Profit Margin of a Real Estate Joint Venture Business 

King’s Signature® Real Estate Group, Inc. will collect developer fees that will range from 5 percent to 10 percent aside from making profits off every property sold.

Growth Plan

A. how do you intend to grow and expand .

King’s Signature® Real Estate Group, Inc. will grow by opening other offices in key cities in the United States of America within the first five years of establishing the business and then expand to other continents by welcoming more partners.

b. Where do you intend to expand to and why?

King’s Signature® Real Estate Group, Inc. plans to expand to Los Angeles – California, San Francisco – California, Chicago – Illinois, Washington, D.C., Boston – Massachusetts, Miami – Florida, Seattle – Washington, Dallas – Texas, and Philadelphia – Pennsylvania.

We intend to expand to these geographic locations because available statistics show that the cities listed above have the highest and most thriving real estate markets in the United States.

The business relationship in a joint venture will typically last anywhere from 5 to 7 years. This is so because joint ventures are formed with a unique business goal in mind and are generally dissolved once the goal has been achieved.

But the founders of King’s Signature® Real Estate Group, Inc. plan to exit the business via merger and acquisition. We intend to merge with an international real estate company that has a world spread so that the company can be placed under a trusted hand when the founders retire.

The goal of combining two or more real estate companies on a global scale is to try and achieve synergy – where the whole (the new company) is greater than the sum of its parts (the former two separate entities).

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Negotiating a better joint venture

In the fast-paced world of deal making, joint ventures (JVs) are a conundrum. Slow in the making, often with complicated structures and shared management teams, they seem out of place in a volatile era marked by buzzwords that hype agility and nimble strategic moves. Yet there they are, more than 1,500 JV deals completed annually over the past ten years, including around 10 percent of them characterized as large JVs, with an initial value of more than $250 million. Their volume seems likely to endure—more than two-thirds of executives surveyed in 2014 reported that they expect to do more JVs in the future. 1 1. Eileen Kelly Rinaudo and Robert Uhlaner, “ Joint ventures on the rise ,” McKinsey on Finance , November 2014. This McKinsey Global Survey was in the field from March 11 to March 21, 2014, and garnered 1,263 responses from C-level and senior executives representing the full range of regions, industries, company sizes, and functional specialties. Of them, 982 executives had personal experience leading or managing joint ventures

But JVs are not always embraced without reservation. In fact, we encounter many executives who express significant concerns, often when they’re wrapped up in the uncertainty of JV negotiations. Given how much longer those negotiations can last compared to traditional acquisitions, this is both understandable and alarming. One global conglomerate we’ve observed advises its US-based headquarters to expect JV negotiations to last three to six times longer than M&A negotiations. That’s a long time for doubt to creep in, particularly if the competitive context justifying a venture might shift in the meantime.

How can executives build healthier partner relationships to give future JVs the best odds of success? Our review of a series of long-standing partnerships—supported by our 2014 survey and a series of structured interviews with JV partners 2 2. We interviewed 45 joint-venture managers. —identified three principles that made a difference in deal negotiations: investing more time and effort up front, working harder to cultivate and sustain the JV relationship, and standardizing key processes and learning mechanisms.

Invest more up front

As business negotiations go, JVs are marathons, not sprints. In their rush to complete a deal quickly and begin capturing value, inexperienced JV planners neglect the foundational steps of planning. Commonly, they jump too quickly into high-stakes discussions on specific deal terms such as how ownership is divided, who nominates key leaders, and what intellectual-property protections will be put in place. What they leave aside is an explicit understanding of how well those terms match the objectives of the deal.

In fact, most companies need to invest more time in the early phases of deal planning and preparing for negotiations. Our research has shown that many planners focus more than half of their negotiating time hammering out specific deal terms that should be addressed late in negotiations and only 20 percent of their time on the JV structure and business model, which should be addressed first. In contrast, those same planners believe that the phases of the process devoted to internal alignment and the business model represent 60 percent of the total value at risk, while the phase devoted to deal terms accounts for only 10 percent (Exhibit 1).

That disconnect between time spent and value derived reinforces damaging habits. Deal terms are important, but they are difficult to correctly perceive and negotiate without a clear articulation of broader issues including deal objectives, market considerations, and walk-away points. Negotiators who lack that foundation are poorly prepared to discuss deal terms. The cost can often be measured in time. For example, negotiations slow considerably when negotiators fixate on specific, preconceived deal terms even though other solutions could also work or when they belabor negotiations on all possible considerations instead of covering the most likely ones. Cost can also be measured by long-term damage to the JV. When negotiators fail to examine a potential partner’s deeper motives or to consider the regulatory landscape fully, companies can end up with deal terms that don’t adequately govern an agreement—and that can carry substantial costs.

For example, after a European company formed a JV to manufacture equipment in China, it unexpectedly learned that local regulators would compel it to transfer a larger equity stake to its Chinese partner, which threatened the deal’s feasibility. If the European company’s negotiators had conducted a more rigorous up-front process, they likely would have discovered that requirement. Instead, the venture’s launch was delayed, and the European company’s governance rights were diminished—consequences that might have been avoided.

Companies can avoid or at least mitigate such problems by investing more time in the early stages of planning. One US agricultural company requires extensive up-front business planning to confirm internal alignment and identify the motives of each counterparty. Planners there credit their rigorous preparation phase for making negotiations smoother.

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That’s consistent with our experience. We’ve found that companies benefit when they set up internal checks and balances to ensure that these foundational issues are articulated and confirmed internally before negotiations with partners begin in earnest. They should also engage potential partners in early discussions to confirm that they all agree on the goals of a joint endeavor, on their expectations of changes in the market over time, and on how the JV should plan to adapt as the market evolves. One global energy company learned this lesson the hard way when its partners in an existing JV objected that a new venture completed by the energy company would, over time, hurt the existing JV’s business prospects. As a result, a foreign court ordered the energy company to pay extensive damages for an initiative that never even launched.

For most companies, a good starting point is for planners to force a tough and thorough self-review to identify their own objectives, goals, and—even more difficult—their strengths and weaknesses as JV partners. Where possible, they should also convince a potential partner’s leadership to do the same, lest they get mired in internal misconceptions in the future.

Cultivate a trusting relationship

Negotiating JVs differs from negotiating mergers or acquisitions because the end goal is a sustainable, ongoing, trust-based relationship, not a one-time deal. Not surprisingly, a significant portion of our survey’s respondents indicated that the level of honesty and trust between the parent companies had a significant impact on the partnership’s overall success (Exhibit 2).

Positive initial meetings are important to establishing trust, but planners need to do more. Regular and ongoing business and social interactions with critical parent leadership-team members, including management off-site events and frequent, engaged board meetings, can help maintain trust and communication, reveal the breadth of motivating factors that influence a partner, and nurture a strong relationship even after negotiations conclude. As one energy executive observed, it is frequently only after many hours together in a “smoky room,” spread over the days, weeks, and months of negotiation, that the true motives of potential partners become clear. Understanding partner motives and securing mutual commitment to a deal beyond its financials will help ensure that all parties share the same expectations of ongoing JV operations.

In our interviews, numerous executives expressed concern about nontraditional objectives that may be motivating potential JV partners. These include sharing capital to upgrade facilities, achieving a relationship with a previously inaccessible third party, or increasing employment opportunities for a specific region. Such objectives often work to the disadvantage of a JV partner, as managers at a global conglomerate discovered. They negotiated a deal with a regional player that included transferring core technology into the JV in order to qualify for lucrative government contracts. Conglomerate executives at first applauded the deal, though the planners expressed concern that their partner’s motives might not be consistent at all levels of its organization. The venture subsequently reached a tipping point when, during an industry conference, the regional company’s senior executives boasted that they would start selling products based on the global conglomerate’s technology, but at a fraction of the price. This forced deal teams on both sides to revisit the partnership’s objectives to reaffirm the relationship’s durability.

Negotiators who understand a partner’s motivation, business needs, and capabilities well before closing a deal will be better positioned to establish a strong, candid relationship with shared, explicit expectations. Thorough research can highlight things that wouldn’t necessarily surface during negotiations but that could affect the partner’s involvement with the JV. For example, one energy company avoided a potential misstep after scrutinizing a partner company’s relationships with distributors before coinvesting in a local manufacturing operation. That analysis made it clear that the partner company’s CEO intended to use his own distribution company to exclusively channel products into a lucrative sales territory. After the energy company escalated its concerns, its partner moved ahead with the venture anyway but did not use the CEO’s distribution company.

How the best acquirers excel at integration

Standardize processes and learning mechanisms.

Unlike dedicated M&A teams that develop negotiating skills over multiple deals, JV teams tend to change from deal to deal, often due to shifting team-member roles and responsibilities or low JV deal flow. That creates little institutional memory around key processes, approaches for managing critical issues, and even partnership-specific negotiating skills. All of these things can be proactively managed, even if deal terms cannot.

Yet our survey of JV practitioners found that less than a quarter have a JV design-and implementation playbook—the kind of simple tool that most companies with M&A programs have had for years to reduce strain for the internal team and to ease discussions with potential partners. Without that kind of institutional knowledge, inexperienced teams often see JV negotiations as zero-sum games; they rigidly calculate wins and losses on every negotiating point. That leaves them with little flexibility to appreciate the needs of a partner interested in entering into a commercial agreement or reaching consensus on the terms of a mutually beneficial JV. The result can be a weak or ineffective deal. For example, one global company faced challenges investing in a regional JV because it focused too emphatically on legalistic deal terms to protect its own interests. That created an adversarial tone in the negotiations and undermined the collaboration needed to allow both companies and the JV to succeed. It also prolonged the process, to the frustration of the JV partners.

For most JVs, long-term success also requires an agreement process that is transparent and follows patterns of conversation established from the outset. At its core, this simply means communicating with all parties about how, when, and what to communicate. The eventual pattern of communication may vary from deal to deal, and not all parties will like it. That’s OK. Just laying it out keeps expectations aligned, focuses conversations, and reduces time-consuming delays. Otherwise, internal approval processes can cause bottlenecks, and not having the right people in the room can bring momentum to a standstill.

Standardized processes are especially helpful once a deal is under way, when adapting and restructuring can strengthen a partnership and increase financial returns—as long as the relationship is strong and the process has clearly allowed for adaptation. One aerospace partnership ensured all parties continued to agree on the goals of the JV by contractually committing to a standardized annual evaluation process. This included valuing each partner’s contributions to ensure that the risks and rewards for each partner remain consistent with the original objectives of the deal. In the event that one partner’s contributions did not match the other’s, the terms of the agreement required the lagging partner to increase its contribution. Together with a management team in which the CEO position is swapped on a regular basis, both partners have been able to maintain a decades-long relationship.

With so many companies planning to increase their JV activity in coming years, it’s worth investing the time in negotiations and planning to ensure the value of these ventures.

Eileen Kelly Rinaudo is a senior expert in McKinsey’s New York office, where Jason Roswig is a consultant.

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Free Joint Venture Agreement Template for Microsoft Word

Download this free joint venture agreement template as a Microsoft Word document and use it to help negotiate your next business joint venture.

Joint Venture Agreement

THIS JOINT VENTURE AGREEMENT (the “Agreement” or this “Joint Venture Agreement”), is made and entered into as of this [DATE], by and between [SENDER.Company] (hereinafter “[SHORTENED NAME OF SENDER]”), a [SENDER STATE OF INCORP] corporation, with a registered office located at [SENDER ADDRESS], and [SIGNER.Company] (hereinafter “[SHORTENED NAME OF SIGNER]”) , a [SIGNER STATE OF INCORP] corporation, with a registered office located at [SIGNER ADDRESS].

WHEREAS, “[SENDER.Company]” is in the business of [SENDER BUSINESS DESCRIPTION], and

WHEREAS, “[SIGNER.Company]” is in the business of [SIGNER BUSINESS DESCRIPTION], and

WHEREAS, the parties desire to establish between them a joint venture in order to collaborate in [JOINT VENTURE DESCRIPTION],

NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants and commitments set forth herein, the parties hereto agree as follows:

1. Formation

The joint venture formed by this Agreement (the “Joint Venture”) will conduct its business under the name [JOINT VENTURE NAME], and will have its registered address at [JOINT VENTURE ADDRESS]. The Joint Venture shall be considered a joint venture between the Parties in all respects, and in no event shall this Agreement be construed to create a partnership or any other fiduciary relationship between the Parties.

The Joint Venture shall be formed for the purpose of (Provide a description of the products and/or services that the Joint Venture is concerned with, and the objective/purpose of the Joint Venture).

3. Contributions

The Parties hereto shall each make an initial contribution to the Joint Venture as follows:

• [SENDER.Company]’s Contribution:
• [SIGNER.Company]’s Contribution:

A bank account at [NAME OF BANK] shall be opened by [SENDER.Company] on behalf of the Joint Venture, and the financial contributions of the Parties shall be deposited by the due date set forth above. Should the Joint Venture require additional funding, additional financial contributions shall be made equally by the Parties.

4. Distribution of Profits

Any and all net income accruing to the Joint Venture shall be distributed equally to the Parties.

5. Management

The following individuals in the following positions will comprise the Joint Venture’s management (the “Management Team”). The Management Team will be structured such that [DESCRIPTION OF MANAGEMENT STRUCTURE].

Management Team: [NAME 1], [POSITION 1] [NAME 2], [POSITION 2] [NAME 3], [POSITION 3]

6. Responsibilities of the Parties

The Parties will each have the following responsibilities under the Joint Venture: [SENDER.Company]’s Responsibilities: [SIGNER.Company]’s Responsibilities:

7. Non-Exclusivity

No exclusivity is formed by virtue of this Joint Venture Agreement and neither Party shall be obligated to make offers to the other related to any business.

This Agreement shall commence on the date first written above and remain in full force and effect for an initial period of [NUMBER OF YEARS] years (the “Initial Term”). At the end of the Initial Term, this Agreement will automatically renew in one year increments (each, a “Renewal Term”), unless and until this Agreement is terminated in accordance with Section 8 hereinafter.

9. Termination

Either Party shall have the right to terminate this Agreement, effective as of the end of the Initial Term or any Renewal Term, by providing the other with written notice of termination at least thirty (30) days prior to the end of such Initial Term or Renewal Term. Neither Party shall have the right to terminate this Agreement at any other time, unless such termination is mutually agreed to by the Parties hereto. The Joint Venture shall terminate upon termination of this Agreement.

10. Confidential Information

The Non-Disclosure Agreement entered into by the Parties as of [ENTER INTO DATE] (the “NDA”) is applicable to the Joint Venture and shall apply in full force and effect to any and all Confidential Information (as defined in the NDA) exchanged or otherwise accessed by a Party under this Agreement.

11. Further Actions

The Parties shall execute any documents and take all appropriate actions as may be necessary to give effect to the Joint Venture.

12. Assignment

Neither Party shall assign or transfer any of its rights or obligations hereunder without the prior written consent of the other Party, except to a successor in ownership of all or substantially all of the assets of the assigning Party if the successor in ownership expressly assumes in writing the terms and conditions of this Agreement. Any such attempted assignment without written consent will be void. This Agreement shall inure to the benefit of and shall be binding upon the valid successors and assigns of the Parties.

13. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of [STATE], without regard to conflicts of law principles.

14. Counterparts

This Agreement may be executed in any number of counterparts, each of which shall constitute an original, and all of which, when taken together, shall constitute one instrument.

15. Severability

The Parties recognize the uncertainty of the law with respect to certain provisions of this Agreement and expressly stipulate that this Agreement will be construed in a manner that renders its provisions valid and enforceable to the maximum extent possible under applicable law. To the extent that any provisions of this Agreement are determined by a court of competent jurisdiction to be invalid or unenforceable, such provisions will be deleted from this Agreement or modified so as to make them enforceable and the validity and enforceability of the remainder of such provisions and of this Agreement will be unaffected.

16. Notices

All notices, requests, demands and other communications under this Agreement must be in writing and will be deemed duly given, unless otherwise expressly indicated to the contrary in this Agreement: (i) when personally delivered; (ii) upon receipt of a telephone facsimile transmission with a confirmed telephonic transmission answer back; (iii) three (3) days after having been deposited in the mail, certified or registered, return receipt requested, postage prepaid; or (iv) one (1) business day after having been dispatched by a nationally recognized

overnight courier service, addressed to a Party or their permitted assigns at the address for such Party first written above.

17. Headings

Paragraph headings used in this Agreement are for reference only and shall not be used or relied upon in the interpretation of this Agreement.

18. Entire Agreement

This Agreement contains the entire agreement and understanding between the Parties, superseding all prior contemporaneous communications, representations, agreements, and understandings, oral or written, between the Parties with respect to the subject matter hereof. This Agreement may not be modified in any manner except by written amendment executed by each Party hereto.

In Witness Whereof, the Parties have caused this Joint Venture Agreement to be duly executed and delivered as of the date first written above.

—————————————–

[SENDER.Company]

[SENDER.FirstName] [SENDER.LastName] [SENDER TITLE]

[SIGNER.Company]

[SIGNER.FirstName] [SIGNER.LastName] [SIGNER TITLE]

Related Documents

Advertising agreement, arbitration agreement, barter agreement, business sale agreement.

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A joint venture takes place when two parties come together to take on one project. In this type of project, both parties are equally invested in the project in terms of money, time, and effort to build on the original concept. While joint ventures are generally small projects, major corporations also use this method in order to diversify. Working in this way can ensure the success of smaller projects for those that are just starting in the business world or for established corporations. Since the cost of starting new projects is generally high, a joint setup allows both parties to share the burden of the project, as well as the resulting profits.

A joint venture is not to be taken lightly. For a businessperson to embark on one, he or she needs to be committed and willing to work cooperatively with the other party involved. A person involved in this type of agreement can no longer make all of the decisions for the business alone. For it to be truly a joint project there has to be 100% commitment from both sides.

When determining whether or not to embark on a joint venture, it is important to ensure both parties are a match with the projected client base. Each party should be able to complement the other in business. Sometimes, a misunderstanding or a lack of communication can destroy a joint venture. Therefore, it is necessary for both parties to be capable of communicating what they are able to offer to the project and what their expectations are.

Since money is involved in a joint venture, it is necessary to have a strategic plan in place. In short, both parties must be committed to focusing on the future of the partnership, rather than just the immediate returns. Ultimately, short term and long term successes are both important. In order to achieve this success, honesty, integrity, and communication are necessary.

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FREE 8+ Joint Venture Proposal Samples [ Commercial, Real Estate, Construction ]

According to the book “Creating Successful Acquisition and Joint Venture Projects”, there are some companies and investors which persist in continuing their engagement in acquisition and joint venture activities despite the difficulties and risk factors. Actually, there are some successful joint venture projects as they result in effective execution and fulfilled projects. But one way to be successful in collaboration with other companies is creating a compelling joint venture proposal. In this article, we will discuss beneficial steps of creating a joint venture proposal, plus we have various downloadable partnership proposal templates for you to use. Please continue on reading!

Joint Venture Proposal

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A joint venture proposal is an essential document that cites target goals, specific objectives, and initial plans developed by the head or manager of the joint venture project along with the project managers of each company. They also showcase the fundamental purpose in obtaining a meaningful collaboration project or business partnership with other different companies or organizations.

In this matter, we highly recommend that you follow the fundamental steps below while freely using one of our joint venture agreement proposal sample templates for construction, commercial, and real estate in this article:

One of the integral factors that you need to consider in creating a commercial partnership or construction joint venture agreement proposal is identifying collaboration goals, and objectives for your joint venture project.  Reflect upon the things you prioritize in your joint venture project and your vision in carrying out your collaboration goals and objectives.

To create a great impact for your potential business partners, you need to thoroughly define your project scope. John Kotter said: “Effective leaders help others to understand the necessity of change and to accept a common vision of the desired outcome.” Avoid using fancy words in your proposal to let others know about your project. The highlight here is you need to represent and describe your ideas about the joint venture project you want to execute. 

After you set direction and build your joint venture project team, you need to provide comprehensive action plans and coordinate them with your key people, and practices according to your mutual purpose. Communicate efficiently with each member as you contemplate crucial solutions to possible issues on your joint venture project. Also, provide necessary information about the estimated budget of the collaboration .

Focus on the essence of the joint venture project and present its unique value and why it is apart from others. Make sure that your collaboration can absolutely encourage many people and support their needs in some ways.  This is a key point for many companies and organizations as they prefer to collaborate with business individuals or firms that possess a unique perspective especially when it comes in developing a meaningful product or service to the society. 

Write an introduction or executive summary of your joint venture project. Then, include some short and clear profiles of the companies involved in the collaboration. Explain the starting point and ideas related to the joint venture especially why companies need to share a type of system, product, technology, and more. Highlight the success probability. After that, include important details such as the main purpose, duration, costs, profits, etc.

When writing for a collaboration project, the members of both teams, groups, or companies should have roles clearly assigned to them. Indicate the strengths and weaknesses of each member. Then, accept the opinions, comments, and suggestions from others. Maintain adaptability despite the differences. 

A joint venture strategy is a type of business agreement between two different companies or organizations with the purpose of collaborating together to reach some specific target goals.

The benefits of joint ventures are scaling up the economical values of companies, gaining access to new markets and distribution networks, initiating cutting edge products and services, maintaining low cost of production, and many others.

Several business firms and other corporate organizations have world-class practices when it comes in performing acquisition and joint venture projects. By using effective strategies, project teams can make things together, produce worthwhile results, and facilitate behavior consistency based on the project goals and objectives. Also, a successful joint venture project requires thorough discussion from a variety  dimensions like the key issues involved and guidelines on how to perform the project successfully. So, get a joint venture proposal template today to start your acquisition and joint venture project journey! 

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22+ SAMPLE Joint Venture Agreements in PDF | MS Word

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Step 1: Make a Scheme of the Whole Process

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