For decades of secret trade tailoring, business firms in the global economy finally collaborated to provide an international model. 10 years ago, the ITC or the International Trade Center conducted a global survey on trade contracts. Responses from TPO's or Trade Promotion Organizations were initially relatively small but later had satisfying results. The dilemma of having no ideal model for international joint venture agreements and the irreconcilable diverse backgrounds of international lawyers had come to an end.
In 2002, some 55 specialists from 45 countries, representing all legal cultures agreed to have a couple of models on international joint venture agreements. Interestingly, they have agreed to help the international business community concentrating on small business enterprises or SME's in small emerging economies. Generally, it provides two options, for more details visit to www.joint-venture-guide.com that is - short term activity for a single project or a long term business relationship between partners for multifarious projects.
Both vary in goals and objectives. The first can be a creation of a new company, the second, the incorporation of two or more companies without the need of creating a new company. To say it more concrete, these are as follows:
1. Incorporated joint venture contract - this model intends to create a new company in a specific country. In this variation, the model allow two or more companies to collaborate and carry out a common activity requiring legal instruments such as by-laws, articles of incorporation, and shareholder's agreement.
2. Contractual joint venture contract - this model does not require the creation of a new company. Thus, a legal new entity is not created. This applies to industries like transportation, for more details visit to www.jointwebventures.com hotel and tourism and, the prospecting and developing of natural resources.
These models fairly address the important needs of small and big business firms. This includes the initial and additional contributions of the parties, management, a legal department for the joint venture, liabilities of the partners (internal and external), sharing of resources, profits, potential risks and loses, a deadlock resolution to all possible conflicts, exclusion of a partner, dispute resolution, acquisition, transfer and loss of partnership status, and the termination of contract of the joint venture agreement.
Construction Joint Venture Agreement
A Joint Venture Agreement is a document that sets out a type of partnership agreement put together for some specific purpose. The agreement spreads the risk attached to the project among the various parties to the agreement as well as details the sharing in any of its success and profits. It also sets out the benefits as well as the risks to the agreement for each of the participating parties.
The joint venture agreement gives an element of control to the project since it establishes the extent of the agreed to actions as well as setting the executive protocols for the smooth functioning and efficient operations of the business venture. In addition, the agreement bears in mind each party's best intentions for achieving the general business goals.
Usually, such an arrangement will be made and entered into on a specified date between the parties to the agreement. It shall set out the business purpose of the agreement as well as define the terms of the agreement which may specify the aforementioned starting date and shall continue till terminated, dissolved by law or ended by other stated provisions. The joint venture agreement may further define the terms as they are used in the agreement.
The obligations of the parties involved shall name who will be responsible for all of the decisions and operations of the business as well as compensating them for services rendered. It shall also state how the profits and losses shall be allocated at the end of each fiscal year.
The agreement shall also name the business participating in the joint venture that will have complete, total and special authority to manage and control the business for the purposes as stated in the agreement. Affiliates of the arrangement may take part in rendering services on behalf of the joint venture. Also, parties to the agreement as well as affiliates may have interests in businesses that do not form a part of the relationship. The joint venture agreement shall also specify the persons or persons who shall pay the expenses of the partnership.
Each of the parties to the agreement shall be indemnified by the other for losses, judgments, liabilities, expenses as well as for amounts paid as settlement of claims sustained by the partnership. In case any of the parties suffers a loss but this is not due to neglect or bad faith and that the course of action taken was in the best interests of the joint venture, then none of the parties will be liable to pay the other for such losses incurred. The arrangement may be dissolved in any of the following instances:
?Bankruptcy, withdrawal removal or insolvency of either party
?Through sale or other disposition of all or most of the significant assets
?Mutually agreed to by the parties to the agreement
Furthermore, the joint venture shall keep adequate books and records of its place of business giving a true and accurate picture of the business transactions. In case any of the provisions of the agreement shall become invalid it would not affect the remaining provisions of the agreement. All notices that are required should be in writing and will be deemed to have been given when deposited in the postal mail or through certified mail or be addressed to the rightful address of the parties to the agreement.
By using pre-defined joint venture agreement forms to enter into a project there are not only substantial savings in time but also completeness is offered in these documents which can be tailor-made to suit individual needs. In addition, the language and attributes of these documents adequately meets the necessary specifications of a legally binding document.
Both Shantajva & Wade Anderson are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Wade Anderson has sinced written about articles on various topics from Legal Matters, Accounting Guide and Business Plan. Wade Anderson is a CPA and operates DigitalWorkTools.com Legal Forms and Business Documents. Click to view a. Wade Anderson's top article generates over 165000 views. Bookmark Wade Anderson to your Favourites.
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