Joint Venture Agreement

What is a joint venture agreement in Australia?

A joint venture agreement, also known as a JV agreement, is a legally binding contract between two or more parties who agree to work together on a specific business project while remaining separate legal entities. This document clearly outlines the main terms and conditions of such a cooperation, including

• details of the participants involved;
• list of duties and responsibilities;
• JV contributions and profit sharing;
• decision-making structure;
• duration and termination of the joint venture.

A joint venture agreement has several important purposes. On the one hand, it protects the legal and business interests of all participants involved by clearly defining expectations and mutual obligations. On the other hand, it allows parties to test the cooperation with each other without rushing into permanent business relations such as forming a company or a partnership.

Who should use this JV Agreement?

A solid and comprehensive joint venture agreement is always a good solution to start business cooperation with a new partner or investor. Therefore, this template can be suitable for:

• new Australian startups expanding into new markets;
• real estate or property developers collaborating on real estate projects in Australia;
• small businesses willing to work together to develop new products, goods or services for Australian customers;
• investors partnering on various commercial projects;
• well-established business exploring collaboration with the new partners before forming a long-term business structure.

What should be included in the joint venture agreement template Australia?

A solid and comprehensive joint venture agreement template must include:

Party Details

Every document should clearly define identification details of the parties involved, including

• full legal name (for businesses or companies) or name (for individuals);
• ACN or ABN number (for businesses or companies);
• registered business or mailing address;
• Contact email or phone number.

JV purpose

All joint venture agreements must state the purpose for which the JV is created, the name of the project, and the goals which the parties wish to achieve. It is better to avoid inclusion of direct and general clauses, as it prevents effective tracking of the JV’s progress.

Warnings and Disclaimers

The document must include a number of important legal warnings on which parties mutually rely when entering a JV agreement in Australia, including:

• Independent Legal Advice. Most joint venture agreements include a disclaimer specifying that each party has been given an opportunity to seek professional legal advice before entering such an agreement. This is done to prevent any future claims stating that a person was not aware of the legal consequences of the transaction and to ensure continuity of cooperation.
• No Employment or Business Relations. The provisions of the JV contract cannot form any employment, partnership or company formation relations between the parties involved. This is a very specific statement aimed to ensure that parties cooperate only as a JV.
• Compliance with Competition Laws. It is important to include an additional statement in a joint venture agreement template ensuring that provisions of the document do not aim to create any price fixing, market sharing or other illegal arrangement aimed at undermining competition in a certain market.

Decision-Making Process

Even a simple joint venture agreement template Australia must define how the major decisions related to the operation of the JV should be adopted. Normally there are two most common options:

• First, all parties adopt decisions together; or
• Second, when parties appoint a board of directors to adopt decisions and manage daily operations of the JV.

The second option is more common for joint venture projects with a significant number of participants, where achievement of unilateral decisions in a timely manner can be almost impossible.

Contributions

The main idea of joint venture agreements is to merge the participants’ mutual efforts to achieve specific goals. These efforts can have various forms, including:

• provision of necessary equipment;
• free rent of commercial spaces;
• provision of personnel;
• free licence for usage of certain intellectual property rights;
• cash contributions;
• provision of services (such as accounting, marketing, legal), etc.

The final JV agreement must define the type, short description and money equivalent of each party’s contribution in Australian dollars.

Term and Termination

The unique feature of all JV agreements is their limitlessness in time. Almost all JV projects are designed to achieve certain goals or complete certain projects. Therefore, the text of a document must define the exact date or moment in the future upon which this agreement shall expire.

Besides that, all parties should be given a right to exit the existing JV contract agreement at any time by providing an advance written notice to the rest of the participants. If, however, there are only two participants, in that case the JV must end automatically.

Profit Distribution

Another important pillar of a joint venture agreement Australia is how the profits and losses obtained by the JV should be distributed between the parties. This only applies to JVs that cooperate in projects for profits and thus can be omitted for scientific, research or charity projects.

In most of the cases, distribution takes place proportionally to each participant’s contribution to the JV. That’s why it is important to define each party’s contribution not only in a cash equivalent but also as a percentage of the total contributions made.

How to customise a JV agreement with FasterDraft?

To get a fully customisable legal document template, follow a few easy steps below:

1. Click the “Create Document” button.
2. Answer simple questions in the form.
3. Select a template’s format – JV agreement template Australia PDF or Word.
4. Make a payment.

Your fully personalised JV contract is ready for instant download after the purchase.

Australian Joint Venture Agreement Checklist

After your JV agreement has been prepared, the following steps should be additionally completed:

Read the Document

Before signing the document, make sure all parties read and understand it. Ensure that each party’s details and information about the parties’ contributions, numbers and dates are accurate.

Sign the Document

All parties involved must sign this JV contract agreement. Without either party’s signature, a document cannot be complete and legally valid. Australian laws do not require further notarisation or registration of the present document at the state or territory level. Parties can put their signature by hand or using online e-signature tools.

Make the JV Contribution

If one or several parties under this Joint venture agreement Australia are required to make a contribution, such a contribution should be made within the timeframe specified by this JV agreement.