Joining your business forces in a joint venture can be a boon for your business and your future goals. But there are a few things any adventurous joint venturer needs to keep in mind.
For example, what exactly are you bringing into the new venture? What happens if it doesn’t work out? And are you adequately protected, legally speaking?
By remembering these five tips, a small business owner can embark on a joint venture with much fewer legal worries:
1. Join for the Right Reasons.
Part of the reason that joint ventures exist is to combine the sometimes disparate resources of separate businesses in order to accomplish something mutually beneficial to all venturers.
But what is mutually beneficial? Joint ventures aren’t always perfectly symmetrical in what goals they pursue, so you should determine ahead of time if linking up is a good long-term plan.
2. Jointly Draft a Joint Venture Agreement.
The joint venture agreement will be the governing document that defines and controls the future of your joint venture, similar to articles of incorporation. So it is important to have all hands on deck when drafting.
You don’t want to have any potential conflicts bubble up through legal channels because you didn’t properly consult your other venture partners on how your joint venture should operate, so make it a team effort.