The joint venture is another agreement that allows a company to squeeze into foreign markets. As the name suggests, the company enters into an agreement with a foreign company and helps increase the project`s equity. The two companies are then equal partners of the company and assume the same debts. In addition to cash, the local partner can bring a team of professionals and their know-how to market the product, while the foreign partner can offer its technical know-how in such a joint venture. The contract must include a provision for profit-sharing and loss sharing. The parties to the joint venture participate in specific and identifiable financial and intangible profits and losses. In addition, members share certain elements of management and control of the joint venture. You can win faster in foreign markets through licensing, but it deprives the foreign party of all the advantages that the licensee can obtain by marketing the product. A joint venture is an association of two or more people who are based on written or oral contracts and combine their assets, assets, knowledge, skills, experience, time or other resources in the pursuit of a particular project or business, generally willing to share profits and losses and each have some degree of control over the business.
If you enter into any type of agreement, especially a licensing or partnership agreement, each party will rely on the other party`s information as true. For example, if you license your article, the other party will want to rely on you to confirm that your article does not infringe any copyright. If you give legal insurance like this, it is a representation and/or a guarantee. If they are not true, the other party has legal action (may make you liable) for “violation” of these insurances or guarantees. I have created licenses, joint ventures (JV) and partnerships for my clients with companies ranging from Disney to Hasbro, Paramount to pop singer Katy Perry. I can tell you that creating an effective partnership of all kinds is really part of art, part of science. While I always recommend professional help, I also think it`s important for every entrepreneur to have a fundamental understanding of what they`re getting for you to defend themselves. It should also be noted that a joint venture may continue to exist even if a member of a joint venture transfers its shares to a third party. It can be sued if the parties to the joint venture continue to act on the basis of the sustainability of the joint venture and act together. The intent of the parties is examined to determine whether a joint venture is maintained and not terminated or terminated. Therefore, the transfer of interest should not end the duration of a joint venture.
There is a little more going into these kinds of agreements, from authorizations to audits, but this crash course should give you a basis to speak intelligently with your consultants about the terms of the partnership or other agreements that you make.