joint venture partnership agreement
Joint Venture Partnership Agreement: Partnership vs Joint Venture Concept
A lot of business people are thinking about developing Joint Venture business; thus, leading to them having the Joint Venture Partnership Agreement. However, you need to know that working together in a business has its own special terms and certain characteristics. Joint Venture and partnership are two completely different things. You may be thinking about having a Partnership when you need fresh cash. If you are thinking about developing a new service or product, then you are thinking about having the Joint Venture scheme. So, how are they different?
Partnership vs Joint Venture
A business partnership is a business structure with two (or even more) people owning the business together – and it is managed in a legal arrangement. As long as the business lasts and exists, it is fairly shared between the owners. Each of the partners contributes their expertise, time, and money to run and create a profitable business until the partnership ends.
On the contrary to the joint venture – the purpose is to do a specific project. It has its own time limit and that time limit is stated in the agreement. For instance, you may think about developing a new program or software. You don’t give up your half portion in the joint venture. But you share the expenses and profits.
When choosing the right nature of Joint Venture Partnership Agreement, you need to understand its nature. Both of them need a contract – it’s designed to specify the rights and responsibilities of each party. The contract enables you the joint ownership as well as the ability to control the partners – within the proportion that they agree and according to the profit details that are going to be shared together. The contract also contains the description and details of each partner’s expertise and contribution (in money). Both joint ventures and partnerships have these elements.
A Matter of Taxes
When you manage the agreement, let’s not forget about the taxes. Both of the partnership don’t pay tax as a single entity. Each partner would be responsible for paying the tax on profits from his individual tax return. But in most cases, the partnership will reduce the business expenses before giving the profits to partners. It is intended to reduce the tax burden of each partner.
There are so many different templates for the partnership agreement, so you shouldn’t have any problem finding one that suits your needs. You can check our samples of Joint Venture Partnership Agreement templates below so you know what to expect.