Business Litigation Lawyer
A good deal of confusion exists regarding partnerships and joint ventures. This is understandable given that they are similar in nature, although they’re usually formed for entirely different purposes. As a business litigation lawyer from Eric Siegel Law explains, here is what you need to know about joint ventures and partnership differences.
Generally, a partnership refers to the agreement between or among two or more individuals to establish a for-profit business that will continue “forever,” or at least for as long as the partners determine. For instance, if you intend to own a business with one or more additional people, forming a partnership is one of your major options.
Joint Venture Characteristics
A joint venture refers to the agreement between or among two or more existing businesses to join forces for the purpose of accomplishing a specific task that neither business could easily accomplish if working alone. Once the task is accomplished, the joint venture usually ends and the businesses involved revert to working on their own. For instance, if you own a construction business, you might enter into a joint partnership with an engineering firm for the limited purpose of building a specific project. In other words, each joint venture business has its own area of expertise, both of which are necessary to the successful completion of the project in question.
Need For Legal Help
Whether you are forming a partnership or a joint venture, your best interests call for the advice, counsel and representation of an experienced local business lawyer. Why? Because both businesses are legal entities that can be quite complicated to set up. If nothing else, both should operate under a written agreement that fully sets forth the responsibilities and ownership interests of all parties, as well as the length of time the entity will last. Actually, each party should seek the advice of his or her own business lawyer so as to protect his or her own interests. Such independent representation minimizes the chance of future misunderstandings that could lead to protracted, contentious litigation.
If you choose to enter into a partnership or joint venture with only an oral agreement in place, you put yourself at great risk. Oral contracts are difficult to prove in court. Their specific provisions are even more difficult to prove since each partner or joint venturer likely has his or her own version of what the agreement entailed. In addition, without a written agreement to the contrary, most courts tend to define a joint venture as an at-will enterprise, meaning that any participant can end it whenever he or she wants to.