Difference Between A Joint Venture Agreement
The joint ventures would not have existed for all these years if they had not been useful and if they had been suitable structures for certain types of companies… but, as with any business structure, the main challenge is to establish them properly and understand their limitations. The agreement between the parties must demonstrate the parties` intention to enter into a joint venture. As a general rule, a joint venture is set up for a specific purpose and for a fixed period of time. The essential consideration of the existence of a joint venture is whether the parties intended to establish such a relationship. In the absence of explicit agreement on the relationship, the status can be inferred from the behaviour of the parties towards themselves and third parties. When a joint venture is incorporated for specific purposes, such a joint venture ends in the achievement of that objective. And if the satisfaction of such a goal is not achievable, then a joint venture would end to the point of inflegitiability. The objective of a joint enterprise agreement is to determine the terms of the agreement between the members.
A joint enterprise agreement should describe the project or objective of the joint venture, the contributions (financial and operational) and the obligations of each member, the duration of the joint venture, the management of the joint venture and the distribution of the revenue or possible expenses of the joint venture. The courts do not look at minor or gambling events that end joint ventures in a friendly manner, since the loyalty requirement applies to members of the company. It has been found that the duration of a joint venture is not affected by small things or temporary complaints that do not cause permanent nonsense. Tiger, Inc. v. Fisher Agro, Inc., 301 p.C 229 (P.C 1989). And note that the project continues until its underlying objective is completed, but all requirements for creditor payment, taxes, etc., are met. For example, if the purpose of a joint venture is to buy land, build a house on the land and sell the house, the business is not complete if the parties receive the profits. Only when the business is properly liquidated, by transporting all taxes held by the joint venture and providing proper accounting to each party within a joint venture. See the tiger case, above. Agriculture is a well-suited business for joint ventures.
As land, equipment and supply costs continue to rise, small farms are under pressure to increase their farms to achieve economies of scale. The key to getting the benefits of joint ventures for your business is to identify another company or business that your business would benefit from. A declared or tacit reluctance to assume the burdens of a joint venture does not necessarily preclude the creation of that relationship, since control may be the content of the legal intent and not the actual intent.