Joint Venture Advisory

When two or more organizations decide to combine resources or skills for a particular project or venture, this is known as a contractual joint venture. These endeavors are not subject to a particular set of rules, in contrast to partnerships. Instead, they are governed by the specified jurisdiction’s contractual laws. In fact, a contractual joint venture is not acknowledged as a legal entity in Canada.

The parameters of a contractual agreement will control how the partners engage in a contractual joint venture. All requirements for making decisions shall be governed by this contract. In Canada, a joint venture’s agreement is a private, confidential contract between the partners that does not need to be registered or filed. An illustration of this would be if a fast-food restaurant added a toy from a movie franchise to children’s meals.

It should be noted that while some experts refer to this kind of arrangement as a joint venture, others simply perceive it as a contract. The word “joint venture” is used loosely here.

When two or more businesses combine to form a corporation, a corporate joint venture is created. This joint venture vehicle must be incorporated once the partners become shareholders in it. In general, the liability of shareholders will be limited to the capital they have invested.

The terms of the contractual agreements, the joint venture entity’s constitutional documents, and general applicable law govern how the partners engage in a corporate joint venture.