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A joint venture is a relationship between two or more people who combine their labor or property for a single business under¬taking. They share profits and losses equally, or as otherwise provided in the joint venture agreement. The single business undertaking aspect is a key to determining whether or not a business entity is a joint venture as opposed to a partnership.
Joint Venture Agreement This Joint Venture Agreement, which Joint Venture is named (Name of Joint Venture), is made and entered into on this (date) for the purpose of engaging in an enterprise for profit, more specifically for (describe nature of business) by the parties whose names and addresses are indicated below: A. (Name of Joint Venturer One) of street address, city, state, zip code, hereinafter called Venturer One. B. (Name of Joint Venturer Two) of street address, city, state, zip code, hereinafter called Venturer Two. C. (Name of Joint Venturer Three) of street address, city, state, zip code, hereinafter called Venturer Three. I. Contributions A. Nature and Amount of Contributions. The nature and amount of the contributions of each party to the Joint Venture are as follows: 1. Venturer One has contributed $____________ which is _____% of the initial capital. 2. Venturer Two has contributed $____________ which is _____% of the initial capital. 3. Venturer Three has contributed $____________ which is _____% of the initial capital. II. Management and Control A. Control. The Joint Venture shall be jointly controlled by the parties whose role shall be equivalent to the board of directors of a corporation. The parties shall meet at (street address, city, state, zip code), or at such other place as may be mutually agreed upon by a majority of the parties. The frequency of such meeting shall be once every month. A special meeting of the parties may be called at any time upon request of at least two parties. A majority of the parties shall constitute a quorum to do business and the decision of a majority of those present at a meeting, at which a quorum is present, shall be the act of the Joint Venture. B. Management. For purposes of managing the operation, business, and affairs of the Joint Venture, the Joint Venture shall be managed by Venturer Three, under such terms and conditions as may be mutually agreed upon. III. Death or Incapacity of Venturer A. Death or Incapacity of a Venturer. If, during the term of this Agreement, a party shall die or become incapacitated in such a way that such party can no longer perform his or her obligations under this Agreement, the following alternatives shall be available: 1. The representative of such deceased or incapacitated party shall immediately become a party to this Agreement in the place of such deceased or © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 1 incapacitated party, who shall have the same rights and obligations in the Joint Venture as the deceased or incapacitated party had. For this purpose, each party must designate a representative to act in such party's stead. Furthermore, each party agrees to make a will and provide in such will that the party's personal representative will continue that party's participation in the Joint Venture; or 2. This Agreement shall be terminated as to such party. Thereupon, such party's share of the profits and losses shall be determined and paid to such party's designated representative, or if none, it shall be held by the Joint Venture until it is ordered by a court of competent jurisdiction to pay it to a particular person or entity. The remaining parties shall continue with the Joint Venture until its term expires as provided in this Agreement. Each party must specify in writing, within thirty (30) days after signing this Agreement, which of the two options stated above such party chooses. Such written specification shall be attached to and form part of this Agreement. Any party who fails to make such choice shall be deemed to have chosen Option 1. Once a party has made a choice, such choice shall be irrevocable for the duration of this Agreement. B. Death or Incapacity of All Parties and Liquidation Trustee. If, during the term of this Agreement, all of the parties to this Agreement shall die or become incapacitated, Acme National Bank of (street address, city, state, zip code), is designated as Trustee to act as such Trustee for purposes of liquidating and winding up the Joint Venture and distributing its assets to their legal representatives. IV. Title to Property A. Title to Property. Legal title to the Joint Venture's property whether real or personal shall be taken in the name of Acme National Bank, as Trustee for the Joint Ventures, and shall be held for their benefit. B. Interest in Property. The beneficial interest of each party in such property, unless changed pursuant to the terms of this Agreement, shall be in proportion to such party's respective contribution, as stated in Section I. V. Division of Profits A Division or Share of Profits. Any profits of the Joint Venture shall be divided among the parties in proportion to such party's respective contribution as stated in Section I. B. Computation of Profits. The following procedure shall be used for the purpose of computing profits, among the parties: 1. Expenses of conducting the Joint Venture shall first be deducted from assets. 2. The parties to this Agreement contributing money, or property measured in money at the agreed value set forth in Section I of this Agreement, shall, after expenses of the venture have been paid, be entitled to a return of such contribution in computing the amount attributable to profits. 3. After contributions in money or property have been returned, any party who is required to contribute time to the venture shall be entitled to © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 2 $____________ per hour for such time from the assets before computing the amount of income or profits available for distribution. VI. Apportionment of Loss A Apportionment or Share of Loss. Should a loss be sustained as a result of the Joint Venture, the parties shall bear such loss in proportion to such party's respective contribution. B. Computation of Loss. In computing any such loss, among the parties, deductions shall be made from any assets remaining in the same manner as computing profits in the article above, that is, deductions shall first be made to pay expenses, and any remaining sums shall be allocated on a pro rata percentage basis to contributions, as set forth above in computing profits. Should there be insufficient assets to pay expenses due and owing as a result of the conduct of the joint enterprise, each party shall contribute to the payment of such expenses in the percentage of losses attributed to such party in this Section. VII. Operating Expenses A. All expenses incurred by the Joint Venture in conducting its operations, business, and affairs shall be paid for by the Joint Venture. Such expenses shall be charged against profits, if any, and if insufficient, from the capital. B. Such expenses shall include, in addition to any other items on which the parties shall mutually agree, all expenses incurred in operating the Joint Venture, such as, but not limited to the following: supplies and equipment, rentals, salaries to third persons, legal services, accounting services, fees and commissions paid to third parties, taxes and governmental fees, insurance, transportation, debt payments, interest, etc. VIII. Withdrawals, Assignments and Transfers A. As cooperative effort of all the parties is required for the successful pursuit of this Joint Venture, the parties agree that in the event any party wishes to withdraw from this Joint Venture during the term of this Joint Venture, such party shall first offer his or her interest in this Agreement to the remaining Joint Ventures at a price to be determined according to the book value of the withdrawing party's interest in this Joint Venture, as indicated in such withdrawing party's capital account, as of the latest financial statement of the Joint Venture. B. During the term of this Agreement, no party may assign or transfer his or her rights and interest in the Joint Venture to a party other than a member of the Joint Venture, without the prior written consent of a majority of the other parties. Any transfer or assignment of any party's interest in the Joint Venture or its profits shall be subject to the rights and obligations provided in this Agreement. No transfer or assignment shall relieve any party of such party's duties or obligations under this Agreement except with the express written consent of the majority of the other parties. IX. Mandatory Arbitration Any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect. © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 3 X. Insolvency or Bankruptcy of Party If, during the term of this Agreement, a party to this Agreement should become insolvent or bankrupt, the remaining parties shall have the option to mutually agree to continue the Joint Venture, excluding the insolvent or bankrupt party, on payment to such party or to such person or persons as a court of competent jurisdiction shall direct, such party's contribution to the capital assets of the venture less accrued expenses and the further payment of any accrued profits attributable to such contribution. If the remaining parties do not mutually agree to continue the Joint Venture, it shall be dissolved and wound up in accordance with the provisions effective under this Agreement on its termination. XI. Not a Partnership The parties agree that this Joint Venture is not a partnership and shall not be governed by the partnership laws of any country or state. XII. Governing Law This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of __________. XIII. Notices Any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement. Witness our signatures this the _____ day of _____________, 20_____. __________________________________ Printed Name of Venturer One Signature of Venturer One __________________________________ Printed Name of Venturer Two Signature of Venturer Two __________________________________ Printed Name of Venturer Three Signature of Venturer Three © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 4 his Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of __________. XIII. Notices Any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement. Witness our signatures this the _____ day of _____________, 20_____. __________________________________ Printed Name of Venturer One Signature of Venturer One __________________________________ Printed Name of Venturer Two Signature of Venturer Two __________________________________ Printed Name of Venturer Three Signature of Venturer Three © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 5
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