Joint Venture Agreement Questions
How do I form a joint venture?While most joint ventures are brought together as a corporation or a general partnership, many people opt for a limited partnership. Joint ventures are generally formed with the idea of completing one task or transaction which generally wouldn't require the need for a corporation or partnership. When forming the joint venture, you will need to have a joint venture agreement drawn up. Listed in the agreement will be each parties contribution to the venture, why the venture has been formed (the goal), the management responsibilities and property interests of each venture member and who has rights to the profits of the venture.
You will need to speak with an accountant to determine how the venture will be formed. By doing this, you will know if the venture will be taxed as a corporation or a partnership.
Does a Joint Venture bidding on government work have to be a separate legal entity like an LLC?A joint venture is a legal entity which means you will be required to get an Employer ID number through the IRS. The joint venture is considered a flow through entity which means the venture members of the joint venture are responsible for the taxes instead of the venture by using a K-1 tax form. The K-1 tax form allows for each person involved in the venture to report their individual credits, income and deductions.
There also needs to be a joint venture agreement that outlines all agreements made by the members of the venture. While a joint venture is a separate legal entity, there is only one difference between the joint venture and an LLC which is liability. The LLC is a limited liability company which provides for liability, where as the members of a joint venture are liable for the joint venture.
How does one get a joint venture partner to cease and desist on a decision to evict our tenant for being late on rent?In order to evict the tenant, all of the owners have to be in agreement. However, if there is a stipulation in the partnership agreement that allows one owner to evict a tenant without the unanimous vote of all owners, there isn't much that you can do to prevent the eviction. If the joint venture partner doesn't have this ability, you can speak for the tenant and offer a tenancy at will option for the tenant. This means that the tenant can stay but you have the ability to change your mind at a later date. Once the court finds out that one of the owners are consenting to a tenancy at will, the court will drop the case.
My husband and I have been asked to make a joint venture with a friend on an invention they want to sell for 1% of the company. We want to know if we join, who pays us for royalties?The first thing that should be done is for all involved to write an agreement and assign each member's responsibilities and duties. This is simply the easiest way to have everyone's duties listed so that everyone can be on the same page as to who does what. When entering into an agreement, you may want to consider an LLC, S Corp, or a limited partnership. By doing this, you only have 1%interest in the entity which means you wouldn't be personally liable.
I am entering in a joint venture/partnership agreement, which form I should purchase and which website should I use?It appears that you would need a joint venture agreement but you should do some research before entering into an agreement that may not be beneficial later on. Generally, sites like legalZoom offer a standard form but they are generally categorized by corporate entity. So, you need to determine which entity will best suit your needs before you purchase a form.
Joint venture agreements are basic agreements that delegate which member does what in the partnership. While this sounds easy enough, for those who are not familiar with joint ventures may have questions or doubts about signing an agreement. Before you sign any agreement, you should ask an Expert to assist you in your choice.