When To Use A Joint Venture Agreement

If you choose to enter into a separate profit-sharing agreement, it is important that the terms are consistent with the joint venture agreement to avoid ambiguity and litigation. To prevent conflicts from spiralling out of control and threatening the entire project, a well-designed dispute resolution process as part of your joint venture agreement is essential. There should be clear guidelines on the first steps to be taken when a dispute develops, as well as clauses on arbitration and mediation and whether or not compensation can be sought if the dispute causes harm to the party. For more information on joint venture disputes, see our article Joint Venture disputes: why they arise and how you can resolve them. When signing a joint venture agreement, the following clauses must be properly considered, such as: the object and scope of the joint venture; Equity participation by domestic and foreign investors and agreement on a future capital issue; Management Committee; financial arrangements; The composition of the Board of Directors and management agreements; special obligations; provisions for the distribution of profits; the transferability of shares in different circumstances; Repair a dead end; Termination; Restrictive agreements on the company and the participants; voting provisions; Appointment of the CHIEF EXECUTIVE OFFICER/DIRECTOR; modification of control/exit clauses; non-compete obligation; confidentiality; indemnification clause; assignment; dispute resolution; The applicable law and the force majeure clause. .