A joint venture combines resources for a defined purpose. Whether structured as an entity or purely contractually, the same questions must be resolved.
Structure. A separate entity gives limited liability, a clean ownership record and a vehicle for financing. A contractual venture is faster and avoids entity-level complexity but leaves each party exposed to the other’s conduct and can inadvertently create a general partnership with mutual agency and fiduciary duties.
Scope and exclusivity. What the venture may do, and what each party may do outside it. Without an express provision, the fiduciary duties attaching to a partnership can restrict both parties far more than they expect.
Contributions and funding. Initial contributions valued and documented, mechanics for additional capital, consequences of failing to fund — dilution, loans, or loss of governance rights.
Governance. Board or management committee composition, matters requiring unanimity, deadlock resolution, and the day-to-day operating authority.
Intellectual property. Background IP licensed rather than transferred; ownership of foreground IP developed by the venture; and rights on termination.
Exit. Term, termination events, buy-sell mechanics, and what happens to shared assets, employees and customer relationships.
Antitrust. Collaborations between competitors require analysis of information sharing and of any restrictions on competition beyond the venture’s scope.