Our company has been approached to participate in a joint venture (JV). What does that entail exactly?
A joint venture (JV) is a cooperative relationship in which two or more business entities work together on a specific project or business activity, usually limited in duration to a specific time frame. In Canada, unlike, say, Mexico, there are no written rules governing JVs like there are for partnerships. While incorporating a new company to house the JV is not essential, it would be terribly imprudent not to have a written joint venture agreement in place to outline the purpose of the relationship, the members’ contributions (financial or operational), their obligations, the term of the agreement and its termination, and the distribution of revenues and expenses. Distinct from other commercial agreements, a JV agreement may provide for a set of operational principles and rules as opposed to fully articulated obligations, leaving the parties with greater operational freedom while keeping a baseline to which they can refer to. At HazloLaw, our business lawyers have extensive experience drafting, reviewing and negotiating joint venture and partnership agreements.