The first step to forming a joint venture is the proper selection of a qualified and credible partner as it is the key to the success of the endeavor. It can also be helpful to find or if capable, form a research and development team that will find the right company, organization, entity. Once the company has chosen the right one, it is very imperative to discuss the road map of duties and responsibilities of the parties forming the venture to further its business visions and goals, and to set a legal ground on the limitations of the parties in the venture.
Once it is done, a Memorandum of Understanding or a Letter of Intent is signed by the parties in which the basis of the future joint venture agreement is highlighted involving all the possible outcomes (such as complications, increased client base) of the agreement.
Before doing so, the terms and conditions of the agreement must be thoroughly discussed in careful detail to prevent any misunderstanding at a later stage that is why it is essential that parties forming the joint venture must be completely aware of the risk and benefits of what they are getting into. The process and negotiations requires an extensive understanding of the cultural, economic and legal background to which the parties reside. The Memorandum or Letter of Intent is then signed by consulting lawyers that are well versed in international laws and multi-jurisdictional laws and procedures.
Few of the factors that need to be considered before setting up a joint venture agreement include the holding and transfer of shares, access of technologies and resources, human resource risk and benefits, funding, dispute resolution agreements, security, tax implications, company’s confidentiality, change of control in both party’s enterprise, and the termination of the terms and conditions of the joint venture agreement.
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- Rivers Corbett
- Rivers Corbett, MBA is an award winning entrepreneur, speaker, and author of "13 Fears of Entrepreneurs" He has received numerous business honors including Entrepreneur of the Year, Canada's Hottest Start-ups List and Canada's Fastest Growing Companies list through Profit magazine and most recently recognized as one of Canada's 10 Mentor RockStars.. Rivers is presently a member of Startup Canada's National Advisory Council, founding entrepreneur of StartUP Fredericton & the "Entrepreneur in Residence" at the University of New Brunswick. His real joy and expertise is being a StartUP Advisor and "zagging while everyone else zigs"...like his two newest businesses ventures the Relish Gourmet Burgers restaurant chain and TheRockStar StartUP for StartUP entrepreneurs. Oh... he is also the leader of a team of over 25 chefs through his other company The Chef Group. Not bad for a guy who hates to cook. Always looking for a new idea to help businesses' succeed...this is his newest marketing discovery for StartUPs The Lyoness Advantage. "Rivers is a 21st century entrepreneur, he's the one to watch" - Jim Gilbert: Canada's Huggable Car Dealer!