Joint Venture Formation

The joint venture is a vehicle for the development of a business opportunity by two ormore entities acting together, and will exist if the parties have: (1) a community of interest inthe venture, (2) an agreement to share profits; (3) an agreement to share losses, and (4) a mutual right of control or management of the venture. A joint venture may be structured as a corporation, partnership, limited liability company (“LLC”), trust, contractual arrangement, or anycombination of such entities and arrangements. Structure decisions for a particular joint venture will be driven by the venturers’ tax situation, accounting goals, business objectives andfinancial needs, as well as the venturers’ planned capital and other contributions to the venture,and antitrust and other regulatory considerations. Irrespective of the structure chosen, however, certain elements must be considered in connection with structuring every joint venture.