The growth of a business often requires the formation of a joint venture – an informal arrangement where two parties collaborate to create a separate entity to conduct a specific business project. The collaborative efforts of each partner are often what makes the venture successful, yet without the correct legal understanding of how to properly form a joint venture, the business may find itself in legal trouble down the road. Executives in Los Angeles should be aware of the questions they need to ask to ensure that their joint venture remains in compliance with the local regulations and applicable laws.

This guide will provide a thorough overview of the most frequently asked questions when forming a joint venture between two parties. It will discuss legal considerations, negotiation strategies, requirements, and issues to bear in mind when engaging in a joint venture in the State of California. Additionally, the article will provide information on how to find experienced counsel that are knowledgeable of the local regulations in Los Angeles.

What is a Joint Venture?

A joint venture is an informal agreement between two or more people, entities, or organizations to combine resources to conduct business operations, develop a new product, or market one of the partnering parties’ products or services. It offers a way to pool resources, lower risk, and form new lines of business.

A joint venture is not a separate legal entity, so it cannot be taxed or sued. Each partner is jointly and individually liable for any law that is broken or debt that is incurred. Therefore, joint ventures allow businesses to take on projects without the legally binding obligations that would come with formally incorporating.

Where Do I Begin?

The first step in forming a joint venture is researching and selecting the potential partner. As with many business decisions, forming a joint venture should begin with due diligence – verifying the potential partner’s financial data, industry background, and sector trend analyses. Reviews from former partners and a detailed analysis on market share are also helpful.

For the Los Angeles business executive, selecting a business as a partner should also include an assessment of the differences in legal approach and cultural perspective that may come into play. Business experts suggest that this step be managed by a legal advisor who is well-versed in the Los Angeles legal market.

What Should the Agreement Include?

When planning a joint venture, a written agreement detailing the goals and responsibilities of each partner is a good starting point. This agreement should assign tasks to each partner, just as any other contractual agreement would.

The agreement should clearly define the percentage of the venture each partner will own, any restrictions they may have on the venture’s activities, the duration of the venture, and any minimum requirements and milestones that must be met. It should also stipulate whether the venture can be terminated by either party, how disputes should be resolved, and what happens when a partner leaves.

What Legal Considerations Should I Be Aware Of?

Depending on the industry and scope of the joint venture, you will likely need to register with the state or local government in Los Angeles. This ensures that the joint venture complies with any applicable zoning ordinances or local laws, and that you are eligible for any tax benefits the venture may qualify for.

It is also important to consult a knowledgeable business attorney, who is familiar with local regulations and business laws, to ensure any formed agreements conform to all applicable laws. This is especially true if the joint venture involves any type of intellectual property, patents, or copyrights.

Finding the Right Counsel for Your Joint Venture in Los Angeles

The best way to protect yourself and ensure that your joint venture is compliant with Los Angeles laws and regulations is to find a knowledgeable attorney who is experienced in the local legal market.

UpCounsel provides a comprehensive network of experienced lawyers who are available for one-time consultations or to become part of your legal team. Their attorneys, who have an average of 14 years of experience, can provide high quality, cost-effective legal services for small businesses, startups, and multinationals in the Los Angeles area.

Their profiles include ratings and reviews from clients who have previously worked with individual attorneys, allowing business owners to make an informed decision when selecting the right legal counsel for their joint venture.


Joint Venture,

Los Angeles,

Business Lawyers