Do we need to form a new company for the joint venture?

Not necessarily. A joint venture can be structured as a purely contractual arrangement between the existing parties, without forming a new legal entity. This is simpler and cheaper but means each party is directly liable for JV activities. Alternatively, the parties can form a new LLC (often called a 'JV LLC') specifically for the venture, which provides liability protection and cleaner ownership of JV assets and IP. For substantial ventures involving significant capital, real property, or long-term operations, forming a JV LLC is generally recommended.

How are joint venture profits taxed?

Tax treatment depends on how the JV is structured. A contractual JV between two parties sharing profits and losses will typically be treated as a partnership by the IRS for tax purposes, requiring the filing of Form 1065 (partnership return) and the distribution of Schedule K-1s to each party. If the JV is structured through an LLC, the tax treatment follows the LLC's classification (partnership for multi-member LLCs by default, or corporation if elected). If the JV is between two corporations, the corporate entity tax rules apply. Consult a tax advisor before finalizing the JV structure.

What happens if one party wants to exit the joint venture early?

The exit provisions in the agreement govern early exits. Typically, a party can exit for cause (if the other party materially breaches the agreement) or by mutual written agreement. Unilateral exit without cause may trigger liability for breach of contract. Upon exit, the departing party's contributions and share of JV assets should be addressed by the dissolution process in the agreement. If the JV has taken on third-party obligations (contracts, loans), both parties may remain liable to those third parties even after one party exits — which is why the exit process should address how outstanding obligations will be handled.

Who is liable for the joint venture's debts?

In a contractual joint venture (without a separate legal entity), both parties are generally jointly and severally liable for JV debts incurred in the course of the venture — meaning each party can be held fully liable for all JV obligations. This is similar to a general partnership. If the JV is structured through a JV LLC, the LLC's members generally have limited liability protection, meaning they are not personally liable for the LLC's debts. This is one of the main reasons to form a JV LLC for substantial ventures.

What are the key IP issues in a joint venture?

There are two main categories of IP in a JV: Background IP (each party's pre-existing intellectual property brought into the JV) and Foreground IP (IP created during the JV). Background IP remains the property of its original owner unless explicitly licensed or assigned. Foreground IP ownership must be expressly agreed upon — the common options are joint ownership (each party can use it independently), ownership by one party (with or without a license to the other), or holding it in a new entity. Joint ownership of IP can be complex because both owners have independent rights to use and license the IP without accounting to the other, which can lead to conflicts. Be specific about IP ownership to avoid disputes.

Does this template work for international joint ventures?

This template is designed for joint ventures between US-based parties governed by US state law. International joint ventures involve additional complexities including choice of law and jurisdiction, foreign investment regulations (including CFIUS review in the US for foreign investment), local corporate law requirements in the foreign country, tax treaty implications, and currency and repatriation issues. For international JVs, you should work with legal counsel experienced in international transactions and the laws of both countries involved.

Legal Templates
Joint Venture Agreement

Free Joint Venture Agreement Template — Fill Out & Download Instantly

Free — No Sign-Up RequiredPDF & WordUpdated April 9, 2026

⚠️ Legal Disclaimer: This template is attorney-reviewed and built to US legal standards. It does not substitute for professional legal advice. For complex situations, we recommend consulting a licensed attorney.

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Governing State*

The state whose laws will govern this agreement

Party 1 Full Legal Name*

Party 1 Address*

Party 2 Full Legal Name*

Party 2 Address*

Name and purpose of the joint venture

Joint Venture Name*

A name identifying this joint venture for purposes of the agreement and any external dealings

Joint Venture Purpose*

What each party brings to the venture

Party 1 Contributions*

Describe all cash, IP, services, equipment, or other assets Party 1 will contribute to the JV

Party 2 Contributions*

Describe all cash, IP, services, equipment, or other assets Party 2 will contribute to the JV

Profit and Loss Sharing Ratio*

The ratio in which profits and losses of the JV will be shared between the parties

Management Structure*

Joint Management Committee — Both parties govern jointly; unanimous or majority vote required for decisionsLead Party — One party serves as managing party with day-to-day authoritySeparate Manager — An independent manager or management company operates the JV

Decision Thresholds*

Intellectual Property Ownership*

Jointly — All JV-created IP is owned jointly by both parties in equal sharesParty 1 — All JV-created IP is owned by Party 1Party 2 — All JV-created IP is owned by Party 2New Entity — JV-created IP is held in a new jointly owned entity

Pre-existing IP of each party remains their sole property regardless of this selection

Include confidentiality / non-disclosure obligations

Include exclusivity provisions

Agreement Term*

Termination Events*

Exit and Dissolution Process*

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JOINT VENTURE AGREEMENT

This Joint Venture Agreement ("Agreement") is entered into as of the date last signed below (the "Effective Date"), by and between:

PARTY 1:

[Party 1 Full Legal Name]

[Party 1 Address]

PARTY 2:

[Party 2 Full Legal Name]

[Party 2 Address]

Together, Party 1 and Party 2 are referred to as the "Parties" and individually as a "Party."

Governing Law: State of [Governing State]

1. FORMATION OF JOINT VENTURE

1.1 Name. The Parties hereby form a joint venture to be known as [Joint Venture Name] (the "Joint Venture" or "JV").

1.2 Purpose. The purpose of the Joint Venture is as follows:

[Joint Venture Purpose]

The Parties agree that the Joint Venture shall undertake only activities reasonably related to the purpose described above. Neither Party shall commit the Joint Venture to activities outside this scope without the prior written consent of both Parties.

1.3 Not a General Partnership. This Agreement does not create a general partnership, limited partnership, corporation, or other formal legal entity. The Joint Venture is a contractual arrangement only. Neither Party shall have the authority to bind the other Party to any obligation not expressly authorized under this Agreement.

2. CONTRIBUTIONS

2.1 Party 1 Contributions. [Party 1 Full Legal Name] shall contribute the following to the Joint Venture:

[Party 1 Contributions]

2.2 Party 2 Contributions. [Party 2 Full Legal Name] shall contribute the following to the Joint Venture:

[Party 2 Contributions]

2.3 Failure to Contribute. If a Party fails to make its required contribution by the agreed date, the other Party may provide written notice of default. If the default is not cured within fifteen (15) days, the non-defaulting Party may elect to either (a) reduce the defaulting Party's profit share proportionally or (b) terminate this Agreement pursuant to Section 8.

3. PROFIT AND LOSS SHARING

3.1 Allocation. The Parties shall share in the profits and losses of the Joint Venture as follows: [Profit and Loss Sharing Ratio].

3.2 Distributions. Profits shall be distributed to the Parties as and when determined by the Parties' mutual written agreement, after setting aside appropriate reserves for JV expenses and obligations. Neither Party shall be entitled to draw against anticipated profits without mutual written consent.

3.3 Losses. Each Party shall bear its share of losses in the same proportion as its share of profits. No Party shall be required to contribute additional capital to cover losses beyond its initial contribution unless agreed in writing.

4. MANAGEMENT

4.1 Management Structure.

4.2 Decision Thresholds. [Decision Thresholds]

4.3 No Authority to Bind. Except as expressly authorized herein, neither Party shall enter into contracts, incur liabilities, or make commitments on behalf of the Joint Venture without the prior written consent of the other Party.

5. INTELLECTUAL PROPERTY

5.1 Pre-Existing IP. Each Party retains full ownership of all intellectual property owned or developed prior to the Effective Date, or developed independently and outside the scope of the Joint Venture, including but not limited to patents, trademarks, copyrights, trade secrets, software, and know-how ("Background IP"). No license to Background IP is granted hereunder except as necessary for the performance of the Joint Venture Purpose.

5.2 JV-Created IP.

6. CONFIDENTIALITY

Each Party agrees to hold in strict confidence all non-public information received from the other Party or developed in connection with the Joint Venture ("Confidential Information"), including without limitation trade secrets, financial data, customer information, and technical know-how. Confidential Information may not be disclosed to third parties without prior written consent of the disclosing Party, and may be used only for purposes of the Joint Venture. This obligation survives termination of this Agreement for a period of three (3) years.

8. TERM AND TERMINATION

8.1 Term. [Agreement Term]

8.2 Termination Events. [Termination Events]

8.3 Exit and Dissolution. [Exit and Dissolution Process]

8.4 Survival. Sections 5 (Intellectual Property), 6 (Confidentiality), and 9 (General Provisions) shall survive termination of this Agreement.

9. GENERAL PROVISIONS

9.1 Governing Law. This Agreement is governed by the laws of the State of [Governing State].

9.2 Dispute Resolution. Any dispute arising under this Agreement shall be submitted to good-faith negotiation. If unresolved within 30 days, the parties shall submit to binding arbitration under the rules of the American Arbitration Association.

9.3 Entire Agreement. This Agreement is the entire agreement of the Parties regarding the Joint Venture and supersedes all prior discussions.

9.4 Amendment. Amendments require a written instrument signed by both Parties.

9.5 No Waiver. Failure to enforce any provision is not a waiver.

9.6 Severability. Invalid provisions do not affect the remainder of this Agreement.

IN WITNESS WHEREOF, the Parties have executed this Joint Venture Agreement as of the date last written below.

PARTY 1:

_________________________________________

Authorized Signatory, [Party 1 Full Legal Name]

Name: ___________________________________

Title: ____________________________________

Date: ______________________________________

PARTY 2:

_________________________________________

Authorized Signatory, [Party 2 Full Legal Name]

Name: ___________________________________

Title: ____________________________________

Date: ______________________________________

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Governing State*

The state whose laws will govern this agreement

Party 1 Full Legal Name*

Party 1 Address*

Party 2 Full Legal Name*

Party 2 Address*

Name and purpose of the joint venture

Joint Venture Name*

A name identifying this joint venture for purposes of the agreement and any external dealings

Joint Venture Purpose*

What each party brings to the venture

Party 1 Contributions*

Describe all cash, IP, services, equipment, or other assets Party 1 will contribute to the JV

Party 2 Contributions*

Describe all cash, IP, services, equipment, or other assets Party 2 will contribute to the JV

Profit and Loss Sharing Ratio*

The ratio in which profits and losses of the JV will be shared between the parties

Management Structure*

Decision Thresholds*

Intellectual Property Ownership*

Pre-existing IP of each party remains their sole property regardless of this selection

Include confidentiality / non-disclosure obligations

Include exclusivity provisions

Agreement Term*

Termination Events*

Exit and Dissolution Process*

What Is a Joint Venture Agreement?

A joint venture agreement is a legal contract between two or more parties who agree to combine resources, expertise, or capital to undertake a specific business project or ongoing commercial activity. Unlike a general partnership, a joint venture is typically limited in scope to a defined project or purpose and does not create a permanent merged business entity. The agreement specifies each party's contributions, the profit and loss sharing ratio, management structure, intellectual property ownership, and the process for exiting or dissolving the venture when the purpose has been accomplished or when one party wishes to leave..

When Do You Need It?

Use a joint venture agreement when two businesses or individuals are collaborating on a specific project or commercial venture without fully merging their operations. Common situations include two companies collaborating to bid on and execute a large government or commercial contract, a manufacturer partnering with a distributor to enter a new market, two real estate investors combining capital to develop a property, or two entrepreneurs combining complementary skills to launch a new product line. A joint venture agreement is also appropriate when businesses want to share research and development costs or combine intellectual property to create a new product..

What's Included in This Template

Both parties' full legal names and addresses
Joint venture name and purpose
Each party's contributions (cash, IP, services, assets)
Profit and loss sharing ratios
Management structure and decision-making authority
Decision thresholds for major actions
Intellectual property ownership rules
Confidentiality provisions (optional)
Exclusivity provisions (optional)
Agreement term and termination triggers
Exit and dissolution process
Governing law and dispute resolution

How to Fill It Out

Identify Both Parties — Enter the full legal names and addresses of both parties. If a party is a business entity, use its full registered name (e.g., 'Bridgewater Construction LLC' not just 'Bridgewater').

Define the Joint Venture — Give the joint venture a name and provide a clear description of its purpose. Be as specific as possible — the purpose should describe the project, market, or activity the JV will undertake, and its geographic scope if relevant.

Describe Each Party's Contributions — Detail what each party is bringing to the venture — cash investment, intellectual property (patents, know-how), services (labor, management), physical assets, or existing business relationships. Include specific values where possible.

Set Profit/Loss Sharing and Management — Enter the percentage of profits and losses each party will receive and how management decisions will be made. Decide whether the JV will be managed jointly by a committee, led by one party, or managed by a separate manager.

Address IP, Confidentiality, and Exit — Specify who owns intellectual property created during the venture. Enable confidentiality if appropriate. Define how the JV will end — through completion of the project, by agreement, or upon a specific trigger event.

Legal Requirements & Notes

Joint venture agreements involve complex business, tax, and potentially securities law considerations. Key issues:

Entity vs. Contractual JV: A joint venture can be structured as a standalone legal entity (an LLC or corporation formed specifically for the JV) or as a contractual arrangement between the parties without forming a new entity. This template covers a contractual JV. For larger or longer-term ventures, forming a new LLC or corporation as the JV vehicle provides liability protection and cleaner ownership of assets and IP.

Tax Treatment: For contractual JVs, the IRS may treat the arrangement as a partnership for tax purposes if both parties are sharing profits and losses, even without a formal partnership agreement. This triggers partnership tax filing requirements (Form 1065) and K-1 distributions to each partner. Consult a tax advisor before structuring a significant JV.

Antitrust Considerations: Joint ventures between competitors may raise antitrust concerns under the Sherman Antitrust Act (15 U.S.C. § 1) if they have the purpose or effect of fixing prices, dividing markets, or reducing competition. Exclusivity provisions should be carefully drafted to avoid restricting competition beyond what is necessary for the JV purpose.

Government Contracting JVs: If the JV is formed to bid on government contracts, additional regulations apply, including SBA rules for small business JVs, mentor-protégé programs, and specific agency requirements for joint venture proposals. Consult government contracts counsel.

IP Assignment: Any assignment of intellectual property created by employees or contractors must be properly documented with assignment agreements signed by the creating individuals. The company-level IP assignment in this agreement is necessary but not sufficient — individual-level assignments are also required.

Frequently Asked Questions

A partnership is generally an ongoing, open-ended business arrangement where two or more people operate a business together and share profits. A joint venture is typically formed for a specific, limited purpose or project and is intended to end when that purpose is accomplished. Joint ventures can be between individuals, corporations, or LLCs, while partnerships are often between individuals. Joint ventures also typically do not create a separate legal entity (unless structured as an LLC-JV), while partnerships are recognized as distinct legal entities in most states. From a legal standpoint, courts sometimes treat contractual joint ventures as partnerships for liability purposes, which is why it is important to address liability and authority clearly in the agreement.

Free Joint Venture Agreement Template — Fill Out & Download Instantly

JOINT VENTURE AGREEMENT

PARTY 1:

PARTY 2:

1. FORMATION OF JOINT VENTURE

2. CONTRIBUTIONS

3. PROFIT AND LOSS SHARING

4. MANAGEMENT

5. INTELLECTUAL PROPERTY

6. CONFIDENTIALITY

8. TERM AND TERMINATION

9. GENERAL PROVISIONS

PARTY 1:

PARTY 2:

What Is a Joint Venture Agreement?

When Do You Need It?

What's Included in This Template

How to Fill It Out

Legal Requirements & Notes

Frequently Asked Questions

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Partnership Agreement

Investment Agreement

LLC Operating Agreement