Differentiating partnerships from joint ventures
The line between what is a joint venture and a partnership can be confusing to decipher. Oftentimes parties intend to only establish a joint venture but are found by the court to have been operating as a partnership.
The distinction between a partnership and joint venture is especially important depending on what the parties intend in terms of their liability to answer for the actions and debts of the other parties. An incorporated joint venture can also operate in a similar space to a partnership where the parties are particularly concerned about undertaking the risk of a complete partnership. Incorporated joint ventures can also be dictated by a shareholders agreement.
Oftentimes the parties have equal vote in the operation of the venture so “deadlocks” are common. We can assist you in drafting deadlock clauses that prevent the venture from being wound up in the event of a disagreement.