Business Acquisition and Joint Ventures in Jacksonville and Orange Park
As a business professional, there might come a time when partnering with another to achieve greater profit will be necessary. In this instance, a joint venture will be sought. However, before a joint venture can be pursued, both parties have to possess an implied or express contract which would consist of the following elements:
- Joint control
- A right to share the profits of the venture
- A shared interest in the purpose of the endeavor
- A joint proprietary interest in the goal
- A shared responsibility to accept any losses equally from the venture.
Joint Ventures in Florida
A joint venture (JV) is an arrangement between two or more businesses to create a separate business entity to make a profit. In a JV, both parties are responsible for any losses, profits, and costs incurred from the project, however, the joint ventures remains a separate investment – completely apart from the businesses’ own companies. Joint ventures can essentially take on any business form like corporations, LLCs, or partnerships. One of the most important aspects of a joint venture will be the JV agreement which will outline all of the necessary details that will bind the two companies together on this entity. This agreement will include elements like:
- Objectives of the joint venture
- The initial contributions from each firm
- How day-to-day operations will be conducted
- Right to profits
- Responsibility of losses.
While a joint venture agreement isn’t exactly necessary, or required under Florida law, it is recommended to have a business transaction such as this to be put into writing, in order to avoid disputes in the future. However, under the Statute of Frauds, if the joint venture is to operate for a period longer than one year, both parties will be required to have an agreement in writing.
Business Acquisition and Joint Venture Legal Representation in the Jacksonville and Orange Park, FL Areas
Prior to forming a joint venture, this business transaction should be carefully considered and the risks weighed from both ends. As stated above, all participants will be responsible for all costs, losses, and profits associated with the JV. It is also best that, if the JV will occur for longer than a year, that all participants sign an agreement, in writing, stipulating the conditions of the joint venture. Our Jacksonville law firm can assist with some of the following concerning joint ventures including:
- Pre-formation issues
- Antitrust matters
- Cash distribution provisions
- Profit and loss matters as well as tax concerns
- Financial obligations and capital requirements
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