When drafting a joint venture agreement, the initiating partner should clearly define the joint venture’s purpose, scope of activities, and the specific goals to align both parties’ expectations from the outset.
Outline each party’s capital contributions, resource commitments, and responsibilities, along with profit and loss sharing arrangements, to ensure financial and operational clarity.
It is advisable to include governance structures, dispute resolution methods, and exit or termination provisions to safeguard both parties’ interests and provide a framework for resolving conflicts.