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Joint Venture Agreement


As there are good business and accounting reasons to create a joint venture (or JV) with a company that has complementary capabilities and resources, such as distribution channels, technology, or finance, joint ventures are becoming an increasingly common way for companies to form strategic alliances. In a joint venture, two or more companies agree to share capital, technology, human resources, risks and rewards in a formation of a new entity under shared control. Important Factors to be considered before a JV is initiated:
  • Jointly set up a detailed business plan.
  • due diligence - checking the credentials of the other party.
  • exit strategy and terms of dissolution of the joint venture.
  • most appropriate structure (f.i. a strategic corporate partnership or a formal new entity).
  • financial agreements.
This is joint venture agreement that is aimed at staffing and performance of projects but is generic enough to be used for a number of possible joint ventures.

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