Although there are many different types of business ventures, one of the most important business ventures involving two or more persons is the joint venture. This legal business entity is particularly lucrative for small businesses who may not be able to successfully compete against larger corporations due to limited experience and financial resources. In addition to this, a joint venture can be set up as a Limited Liability Company (LLC), S Corporation (S Corp) or a C Corporation (C Corp). In some instances, such as the case of a law firm, a joint venture can also be set up as a Limited Liability Partnership (LLP).
What is a Joint Business Venture?
A joint venture is the coming together of two or more individuals or two or more separate business entities to form or create a new business relationship. And, unlike a traditional partnership between two or more individuals or entities, a joint venture can be created for a limited time in order to complete a specific project. Although there may not be a clearly defined end date to the venture, it does not have to be a long term business relationship. Furthermore, if two or more entities form to create a joint business venture, each of the entities may maintain their separate identity and continue to perform business operations under that structure as normal.
Fiduciary Duties
Under a joint business venture the fiduciary responsibilities are important as each partner in a joint venture relationshiphave a legal obligation to act in the best interest of the venture and not in the best interest of any individual party. The legal doctrine of fiduciary duty requires each partner in a joint venture to work together to ensure the success of the entire project or business. Fiduciary duty begins when the parties start negotiations and it continues on throughout the completion of the project in question or until the business venture is legally dissolved.
Responsibilities as Prescribed
A joint venture created with two entities requires a competent business attorney or corporate litigation attorney to draft and submit necessary forms and agreements to the Secretary of State. A joint venture is created through legal documents otherwise known as a “joint venture agreement.” This legal document is complicated to draft and it allows each partner of the venture to define specific duties and responsibilities that will be performed during the course of the venture. These duties are generally based on the skills and experience each party has when coming into the business relationship. As such, each party becomes liable for the duties prescribed in the agreement and they can be sued if they breach the agreement. To better ensure that a joint venture or a Joint venture agreement is properly created, and to ensure that the rights, duties and responsibilities of each partner are distributed equitably, it is important to consult with asuccessful business attorney such as those employed at Goldstein & Scopellite, PC in order to protect your interests.
Legal Remedies
In the event that either party acts to jeopardize the success of the joint venture, legal intervention, mediation or litigation can be used, especially if your business suffers a substantial fiscal loss. Please contact the business formation attorney at Goldstein & Scopellite, PC to discuss any upcoming business venture and your legal and formation options.
Goldstein & Scopellite, PC, was established in the year 2002 and has offices located in Dallas, Texas and Tucson, Arizona. For more information, see the Goldstein & Scopellite, PC local listing in D Magazine.
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