Contents
What Is A Joint Venture Agreement?
Joint Venture Agreements are essential instruments for when two or more businesses decide to collaborate towards the same strategic objectives. In 2025, as market dynamics continue to evolve, these agreements ensure that each party clearly understands its roles, responsibilities and the expectations placed upon it.
There are two main types of Joint Venture (JV) arrangements: unincorporated and incorporated. The unincorporated structure allows the parties to work together under a contractual framework while retaining their separate legal identities, whereas an incorporated JV establishes a new company, governed by a JV Shareholders Agreement. For further insights on business structures, check out our Business Structure Guide.
When Do I Need It?
If you are partnering with another business to achieve a particular goal, product or project, it’s advisable to have a Joint Venture Agreement in place. This is especially true when each party brings a unique resource or skill set to the table. Even if the project is long-term, it is common for the joint venture to have a defined end, with the parties reverting to their separate business identities. For more information on identifying the right business model, you might want to take a look at our article on Business Structure Matters.
How Do I Use It?
Typically, a Joint Venture Agreement is negotiated between the parties to set out each one’s contributions, obligations and how profits and expenses are allocated. Once a mutual understanding is reached, it is wise to have the contract formally drafted by a lawyer. This ensures the document complies with current Australian law in 2025 and minimises potential legal or commercial risks. Our Contract Review and Redraft service can help keep your agreement updated as industry practices evolve.
In the current legal landscape, it is also crucial to review and update your JV Agreement periodically as your business environment changes. Whether it’s addressing emerging regulatory requirements or incorporating best practice dispute resolution methods – such as mediation or arbitration – staying proactive can safeguard your venture. For more detailed advice on risk management, consider our resources on Negotiation Support.
Joint Venture Agreement Example
| Izzy is a clothing designer and Mitch runs an online clothing store. In 2025, they decide to launch a new organic clothing line based on sustainable practices. Izzy designs and produces the clothing using ethically sourced materials, and Mitch leverages his established brand to market and sell the products online. Recognising that production costs are higher, they agree to a profit split of 70% to Izzy and 30% to Mitch. Before committing significant resources, they consult a lawyer who assists in drafting an unincorporated Joint Venture Agreement that encapsulates these terms, along with dispute resolution and termination clauses. |
What’s In A Joint Venture Agreement?
A comprehensive Joint Venture Agreement typically covers a range of critical issues to ensure the success of the venture:
- Roles and Responsibilities – What is each party contributing in terms of expertise, resources and intellectual property? If you’re concerned about protecting your creations, our Intellectual Property services can help.
- Management – How will day-to-day operations be managed and who holds decision-making authority? Learn more about effective management in our Industry Regulations Guide.
- Cost and Profit Share – How are profits and expenses distributed between the parties, especially in fluctuating market conditions?
- Timeframe – What is the defined lifespan of the JV, and what are the exit strategies once the venture concludes?
- Intellectual Property – Who retains ownership of existing IP and what happens to IP created during the venture? For detailed advice on this subject, read our Trade Mark Registration article.
- Dispute Resolution – What processes will be followed if disputes arise? Including alternative dispute resolution methods such as mediation can help avoid lengthy court processes.
- Liability – How will liabilities be shared between the parties? Ensuring that each party is adequately indemnified is crucial, as explained in our Deed of Guarantee and Indemnity guidance.
- Termination – What are the procedures if one party wishes to exit the venture prematurely? Clear termination provisions can prevent future disputes.
Joint Venture Dissolution
A Joint Venture Agreement should clearly outline how the venture can be terminated, often detailed in a Joint Venture Dissolution Agreement. Updated for 2025, these provisions address the process for dissolution, including the distribution of assets, handling of liabilities and the management of any intellectual property rights post-dissolution.
If you require assistance with drafting or reviewing dissolution provisions, Sprintlaw offers a Joint Venture Dissolution Agreement package. This package includes consultations with our experienced lawyers to ensure your documents reflect current legal standards.
Need Help With A Joint Venture Agreement?
When entering a Joint Venture, you are taking on considerable commercial and legal risk by relying on another party to deliver on shared goals. Investing in expert legal support can help prevent disputes, mitigate misunderstandings and ensure you secure a fair deal for your business. The one-off cost of obtaining professional advice now can save you significant time, money and headaches in the future.
At Sprintlaw, our experienced team of lawyers is ready to assist with your Joint Venture Agreement and other legal documents your business may require. Whether you need help with Consulting Agreements or a comprehensive review of your existing contracts, our expert advice is available. Contact one of our consultants for a no-obligation chat about how we can support your business ventures in 2025.
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