Training and name. The parties create the joint venture without legal personality and define the general objectives. The duration of the joint venture is also covered. The two parties and their authorized representatives meet to carry out operations related to [JointVenture.Name]. Both parties agree on all decisions, obligations or obligations related to the joint venture. In the event that the two parties fail to reach any mutual agreement, a mutually acceptable third party will act as an arbitrator to resolve these disputes and reach a mutually acceptable conclusion. Detailed schedules are provided to describe the project manager`s authority, the in-kind contributions made by the parties to the joint venture, and the initial working capital requirements. In addition, the agreement should address insurance, borrowing and taxation issues. Even with a well-developed agreement, there can be disputes.
This is how dispute resolution procedures, such as mediation or arbitration, are seen. For many joint ventures, an LLC is the ideal structure because it combines the protection of corporate responsibility with many tax and financial benefits of a partnership. Both parties agree to make necessary contributions in time and cost, as long as necessary to carry out the obligations of the joint venture. None of the parties is required to offer a fixed period to support the joint venture. Both parties are free to continue their activities outside the joint venture and have no obligation or responsibility to draw the other party`s attention to additional business opportunities. The temptation to create a joint venture to adopt a project larger than the normal project is attractive and can create a way to achieve the major objectives of the project much more easily. Joint ventures can allow you to grow geographically, increase your labour capital and even spread the risk a little. But a joint venture requires a leap of faith and serious thinking.
Prior to the acquisition of the “Sprung” joint venture, there are a number of things to consider: both parties agree to make the same working capital contribution that is required for the completion and completion of work by [JointVenture.Name] and cannot be deducted from the accounts [JointVenture.Name] without the prior written consent of both parties. Bank accounts are opened in the name of the joint venture, subject to the agreement of the board of directors, which sets instructions for the operation of these accounts, and the terms of the signing of all payments to the joint venture are paid into the bank accounts. Both parties agree to be known jointly as [JointVenture.Name] and agree to obtain appropriate authorization on behalf of [JointVenture.Name] prior to the completion or execution of construction projects. A joint venture can be financed by equity, loans or shareholder loans. In point 10.6 above, the contracting parties agree not to exercise a right of “hanging” with the bankers of the joint venture. The objective is to ensure that the bank cannot contract funds from the joint venture`s accounts in order to compensate for any debts of one of the parties to the bank. If you add another contractor`s relationships with suppliers and other companies to your arsenal, access to equipment and knowledge of local market conditions can bring benefits in tenders, labor relations and other areas. A joint venture also immediately increases working capital, staff, equipment, expertise or skills, as well as other resources that can be made available for a project, allow you to offer larger and more complex projects than you could. There are many ways to structure a joint venture, including partnerships, private equity and limited liability (LLCs) companies.