Can a Joint Venture be Beneficial to Your Business? Answers from a Fort Worth Business Lawyer
Whether your business is looking to enter a new market, increase market share, or expand its offerings to customers, a joint venture can be a beneficial opportunity. If you are exploring a joint venture, then you should contact a Fort Worth business law attorney to guide you through the process. Joint ventures are organizational structures that take the form of a strategic alliance/partnership occurring between two (2) or more business entities that have a mutual interest in transacting business together for the duration of a specific project. The joint venture can be short- or long-term and, unlike a merger, each entity maintains ownership of its original business. The point of a joint venture is to create a strategic alliance which combines resources while sharing the risks of the project amongst the participants of the alliance.
As mentioned above, a joint venture can be beneficial to each entity involved for many reasons, including:
- Easing the entry into a new market;
- Increasing market share;
- Gaining additional financing.
Along with potential benefits, joint ventures also involve risks. Some of these risks include:
- Loss of money and or resources;
- Damaged brand loyalty or reputation;
- Conflict of interests.
As such, it is important that there are clear business goals/objectives established prior to commencing the partnership.
There are legal implications to creating a joint venture. Texas law requires that members of a joint venture:
- Come to an agreement, expressed or implied by actions, to join as partners in a venture;
- Identify the purpose of the partnership;
- Have equal right to be heard in regards to the venture; and,
- Have a common economic interest.
Additionally, the agreement should include terms regarding the division of assets and liability, how and when the venture will be dissolved, which state’s law will govern the venture, or whether mediation is mandatory in the case of a breach of contract or conflict amongst the joined entities.
Many of these implications can be sorted out via a partnership contract drafted by the attorneys of each entity prior to beginning the alliance. It is advised that each entity seek its own legal counsel in negotiating, drafting, and reviewing the terms of the partnership agreement. A Fort Worth business lawyer can assist in securing your legal rights during the transaction.
If you are doing business in the Fort Worth Texas area, then you should contact a Fort Worth business law attorney to advise and assist you in the negotiation and drafting of the joint venture agreement. The business law practice of the Hurr Law Office, P.C. has experience with advising clients of their legal rights and responsibilities upon entering a joint venture. The attorneys at our office are well qualified to be your Fort Worth, Texas business lawyer. Give us a call today at (877) 350-9181 to discuss your business’ legal needs and strategy.