Business & commercial

Joint venture agreements in Victoria.

A joint venture is two or more businesses putting money, land, skill or IP into a single project. It works while everyone agrees. CMK Legal drafts joint venture agreements that set out who contributes what, who decides what, how profits are split and how a party exits, so the venture survives the first disagreement.

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Solicitor-drafted

Agreements drafted for the venture in front of us, not from a template.

Practical timeframes

First draft usually within a week of the term sheet being settled.

Fixed fee, quoted first

Fixed fee for drafting and negotiation, agreed before we start.

Australian commercial law

Corporations Act, partnership law and Victorian property practice.

What a joint venture agreement does.

Joint ventures take two main forms. An incorporated joint venture uses a new company with the participants as shareholders, which gives limited liability and a clean structure but adds a corporate layer. An unincorporated joint venture is purely contractual, with each party holding its own share of the assets and taking its own tax position, common in property development and construction.

Whichever structure you choose, the agreement has to answer the same questions: what each party contributes and when, how the venture is funded and what happens if someone cannot meet a call, who manages the day-to-day, which decisions need unanimous consent, how profits and losses are shared, who owns the intellectual property created, and how confidential information is treated.

The clauses that earn their keep are the ones about disagreement and exit: deadlock resolution, default, drag-along and tag-along rights, pre-emptive rights on a transfer, a buy-sell mechanism, and how the venture is wound up and the assets distributed at the end. We also make sure the joint venture is not accidentally a partnership, which would make each party liable for the others' acts.

A joint venture without a written agreement may be treated as a partnership at law, meaning joint and several liability for the other party's debts and conduct. The document is not paperwork; it is the thing separating your business from theirs.

What we make sure the agreement covers.

Control and decision-making

Who runs the venture day to day, which decisions require unanimous approval, how the board or committee is composed, and what happens when the parties cannot agree.

Contributions, funding and profit share

Cash, land, plant, IP or labour valued and recorded, further capital calls defined, dilution or interest consequences for a default, and distributions set out with a clear formula.

IP, confidentiality and competition

Background IP stays with its owner, project IP is allocated deliberately, confidential information is protected and reasonable non-compete and non-solicit obligations are imposed.

Exit and deadlock

Buy-sell mechanisms, pre-emptive rights, drag and tag rights, default remedies, and an orderly wind-up so the venture can end without litigation.

You need a joint venture agreement if.

  • You are developing a property with a landowner or a builder
  • You are pooling capital or equipment with another business
  • One party brings the IP and the other brings the funding
  • You are bidding for a contract as a consortium
  • You want profits split differently from ownership percentages
  • You need certainty about who owns what the venture creates
  • You are working with an overseas partner entering Australia
  • The parties are already working together with nothing in writing

The best time to agree an exit mechanism is while everyone is still optimistic. Once the relationship is strained, no one will sign a fair one.

How we document a joint venture.

  1. 01

    Understand the venture

    The project, the parties, the contributions, the money and the outcome each party is actually after.

  2. 02

    Structure advice

    Incorporated or unincorporated, with the liability, tax and duty implications explained alongside your accountant.

  3. 03

    Term sheet

    The commercial deal captured in a short heads of agreement so the parties agree before the drafting bill starts.

  4. 04

    Drafting

    The joint venture agreement, and where relevant a shareholders agreement, constitution and unitholders deed.

  5. 05

    Negotiation

    Comments from the other side's lawyer worked through, with practical positions rather than point-scoring.

  6. 06

    Execution and set-up

    Signing, company or trust establishment, ASIC lodgements and any land or IP transfers completed.

Transparent joint venture fees.

We quote a fixed fee for the term sheet and the joint venture agreement once we understand the structure and the number of parties. Negotiation rounds beyond the quoted scope, entity establishment and any property or IP transfers are quoted separately so there are no surprises.

Request a fixed-fee quote

FAQs

Joint venture FAQs.

Still unsure? Call us on (03) 9008 7224 and speak to a lawyer, not a call centre.

What is the difference between a joint venture and a partnership?
A partnership is a business carried on in common with a view to profit, and partners are jointly and severally liable for partnership debts. A joint venture is normally a single project with separate liability and separate tax positions. Without a written agreement expressly excluding partnership, a court may find one exists, which is the outcome most parties least want.
Should the joint venture be incorporated?
An incorporated joint venture gives limited liability, a clear ownership register and a simpler exit through share transfers, at the cost of another entity to run and its own tax return. Unincorporated ventures suit shorter projects where each party wants to take its own share of income and depreciation. The right answer depends on the project length, the funding and your accountant's tax view.
How are profits usually shared?
However the parties agree, and not necessarily in line with ownership. It is common for a party contributing land to take a preferred return before profits are split, or for a funding party to receive its capital and a hurdle return first. What matters is that the waterfall is written out with worked definitions, not described in general terms.
Who owns the intellectual property the venture creates?
Only what the agreement says. Each party should retain its background IP and license it to the venture for the project, while IP created during the venture is allocated deliberately, jointly, to the venture entity, or to one party with a licence back. Silence produces expensive arguments later.
What happens if the parties deadlock?
A well-drafted agreement escalates first to the principals, then to mediation, then to a mechanism that actually resolves it, a buy-sell (shotgun) clause, an expert determination, or a structured wind-up. Without one, deadlock in a 50/50 venture usually ends in an oppression or winding-up application.
Can a party sell its interest?
Generally only subject to the agreement. Standard protections are pre-emptive rights giving the other party first refusal, tag-along rights so a minority can exit alongside a majority sale, and drag-along rights so a minority cannot block a whole-of-venture sale.

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