Partnership Agreement Vs. Joint Ventures
When two or more individuals, groups, companies or corporations decide to jointly participate in business activities, they may enter into a partnership. Partnerships are governed by partnership agreements. Joint ventures are special types of partnership, and a joint venture agreement should cover additional factors not necessarily needed in a partnership agreement.
A partnership involves two or more individuals, groups, companies or corporations. Each partner participates in business operations and is liable for company actions. Business debts and profits pass through to the partners. In a general partnership each partner is individually liable for the company’s actions and debts. In a limited partnership the general partner is the managing partner with full responsibility and liability for the company’s actions while the limited partner has limited liability and usually only provides capital and shares in the profit without participating in management of the business.
Joint ventures are typically short-term partnerships between two or more individuals, groups, companies or corporations. Entities usually engage in joint ventures for a single purpose, such as to access new markets or to share costs. Once established, a joint venture can structure its business as a general partnership; a limited partnership; a corporation, which is treated as an individual with its own assets, liabilities and taxes; or a limited liability company, which limits partner liability and allows pass through of profits. The governing laws for joint ventures depend on the scope of the partnership and the type of structure established to conduct business.
Partnership Agreement Defined
The Uniform Partnership Act, adopted by many states as the governing partnership law, defines a partnership agreement as “the agreement, whether written, oral, or implied, among the partners concerning the partnership, including amendments to the partnership agreement.” The partnership agreement is the contract that governs the behavior and actions of the partners in regards to the business. However, state law prevents the contract from eliminating certain duties of the partners. For example, the agreement cannot eliminate a partner’s liability for actions of the company.
Partnership Agreement Basics
很重要,因为每一个合作协议partner can be held completely liable for the company’s actions and can unilaterally make business decisions without the consent of other partners unless otherwise stipulated by the partnership agreement. The partnership agreement should outline distribution of shares, responsibilities and authority of each partner as well as make provisions for the termination or dissolution of the partnership.
Joint Venture Agreement
In addition to establishing the financial and managerial structure and providing for the dissolution of the partnership, a joint venture should outline the purpose of the joint venture as the partnership is formed to meet a specific business objective.
- Legal Information Institute, Cornell University Law School: Partnership
- The University of Iowa Center for International Finance and Development: What is a Joint Venture?
- Legal Information Institute, Cornell University Law School: Joint Venture
- University of Pennsylvania Law School: Uniform Partnership Act (1997)
- The Cooper Union (New York): Joint Ventures Information
Michele Jensen started writing professionally for businesses in 1999. Her writings include articles for eHow, Answerbag and COD, marketing materials and project-related documentation. She received her Bachelor of Science degree in electrical engineering from the University of Houston and a Master of Science degree in international relations from Troy State University.