Companies of all sizes can use joint ventures to strengthen their long-term relationships or cooperate on short-term projects. Most joint ventures will produce intellectual property that is of potential value to each of the parties to the joint venture. This can range from things such as customer lists or information about certain business opportunities, to software code rights or new technologies. If it has previously drawn up such an agreement, it may consider certain sections as pro forma. But he will almost certainly look at you to create the purpose of the joint venture. Head of Terms, properly designed at the beginning of the process, will prove invaluable at this point. Heads of Terms are generally not legally binding, but set out a roadmap that the parties can use to further develop a formal agreement. Some of the issues that should be addressed in a good Head of Terms document include: · Always have a clear line of communication. It is preferable to have prior personal meetings with all the key players involved in the Joint Undertaking. The joint venture agreement explains who will contribute what to the company.
The goal is to ensure that each party understands what it is going to do for the company and to ensure that it is bound by this obligation. You say that, for a particular reason, small entrepreneurs have two eyes: one on existing customers and the other on potential new customers. This condition may not be considered a tunnel view, but it`s not an understatement to say that customers can form together a unique focus that stimulates time and guides the energies of most people in a small business. If you think that customers represent opportunities for business growth, but also that opportunities come in different packages, then it may be worthwhile to at least expand the scope of your focus on a joint venture. Some of the problems with a shareholders` agreement are: A consortium is another type of business agreement between two or more companies. The main difference between a consortium and a JV is that a consortium is generally seen as a more flexible agreement between companies that remain decisively separated. Entities work together in a project — for example, construction companies that build a skyscraper — but don`t exert much influence on one another. The other fundamental document to articulate is that of the articles which are a published document and are known to the members. .