A joint venture agreement is a contract where two companies develop a new entity to their mutual benefit. In the world of business whenever two persons and parties are agreeing to start business as partners they signed a joint venture agreement. Typically the joint venture agreement template is likely to explain as a partnership agreement because such agreement which always serve as a lawful document which will protect the rights of both parties as well as assist them to work together and share profit or loss collectively without any prohibition. As things go people can assume that joint venture is a business arrangement in which two or more parties always agreeing to pool and accumulation their overall resources for the purpose of accomplishing a particular task in a specific period of time. This agreement is entirely similar to a partnership, seemingly it’s a partnership of two people or businesses those are coming together for a same cause. Almost certainly such cause could be a task, a new project or any other business activity. This agreement has a legal worth which typically bound two companies and individual on same frame for one or more signed projects with a limited amount of time mentioned on aforesaid agreement.
As far as the joint venture agreement has several sub-types, just like; contractual joint venture agreement, corporate joint venture, and long term partnership agreement. Here one thing I like to clear during the preparation or creation of joint venture agreement template all the entities will agree to allocate specific resources, for instance; use of collective money, strength of employees, use of equipment, combination of technology, share of profit, division of overall resources, exact time frame, etc. Usually companies start joint venture when they’re fighting with following happens, just like; lack of technology, negative popularity, low power/output, less resources, mismanagement, & even more, although when an individual or business join hands together with other companies in order to have more power in their hands they share their resources to establish a great impact in market. Moreover a joint venture always suggest as a strategic alliance between two or more parties that obviously will allows each other together build a business rather than working on separate businesses. As a matter of case the agreements of Joint ventures are commonly used by companies to become active player in a new territory and return higher profits by expanding the company’s network with the support of their strategic alliance with other business.