Phoenix Joint Ventures Attorney

Arizona lawyer guides businesses seeking to partner with other firms 

Sometimes, two or more businesses might wish create a joint venture in order to take advantage of a business opportunity. If you are an Arizona company contemplating such an arrangement, Donald Hudspeth is a Phoenix joint ventures attorney whom you can trust. Our firm advises all types of businesses on the legal requirements necessary to establish a joint venture, and protects clients’ interests at every stage of the process. 

Key elements of a strong Arizona joint venture agreement

A joint venture is an agreement between two already existing businesses to create and operate a different company. The newly formed entity might be established for one particular project or have a broader scope. Key terms within the agreement include the following:

• Capital contributions and ownership interests for each parent business 
• The joint venture’s scope, governance structure, decision-making authority and duration
• Profit distribution terms

Depending on the circumstances, the joint venture might be a corporation, partnership, limited liability company or another type of business entity. Day-do-day control could rest with executives from the parent firms, or a manager employed by the joint venture. 

Choosing the right legal structure for a Phoenix joint venture

As a joint venture is distinct from the business entities creating it, decision makers have the option to use any legal structure authorized by Arizona law, such as:

• Corporation — This is a formal entity that might be subject to taxation but limits liability to the assets owned by the joint venture, shielding the parent companies.  
• Limited liability company (LLC) — As an authority on LLC formation law, we can show how this entity can combine the protection conferred by a corporation with the flexibility and financial advantages of a partnership.  
• Partnership — In this business form, the partner companies themselves are generally liable for the debts of the joint venture. The partnership is not separately taxed.
• Contractual joint venture — In this type of agreement, the joint venture does not include an independent legal entity, and the parties are responsible for their share of the joint venture’s debts, including taxes.

Some businesses opt for a separate structure joint venture because managing the operation through both parent companies could be complicated or difficult.

Dispute resolution and exit strategies in joint ventures

Joint ventures can break down as a result of disputes or other problems, or simply because one of the businesses chooses to exit. In the event of a dispute, the parties may engage in negotiation, with or without the help of a mediator. Many agreements include clauses requiring disagreements that cannot be resolved among the owners to be decided by an arbitrator. Without such language, there could be costly, time-consuming litigation. 

One or all of the participating businesses might choose to exit a joint venture because of a dispute, lack of profitability or any other reason. In such a case, a buy-sell provision in the joint venture agreement can help determine how the arrangement will be unwound, including compensation that one owner might owe to another. The agreement can also provide for closing the joint venture and distributing the assets when it has completed its objective.

How hiring a Phoenix joint venture attorney can help protect your investment

A knowledgeable Phoenix business law attorney can be vital to the success of your Arizona joint venture in a number of ways. First, we can conduct due diligence to determine if the collaboration is likely to achieve its goals. If so, our firm can negotiate a joint venture agreement to protect your long-term interests. Then, we can continue to advise you on all legal aspects of the joint venture and, if necessary, represent you in any disputes that might arise.

Contact a knowledgeable Arizona business lawyer 

At the Law Offices of Donald W. Hudspeth P.C. in Phoenix, we draw on decades of experience to provide insightful counsel on joint ventures and other Arizona business issues. For a consultation, please call 866-696-2033 or contact us online.