Free Joint Venture Checklist

Written by Jefferson Highway, General Counsel

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9. Non competition. Willrepparttar parties torepparttar 141603 venture be prohibited from competing directly withrepparttar 141604 new business? Is it restricted territorially?

10. Sharing of information. What rights dorepparttar 141605 partners have to know aboutrepparttar 141606 internal workings ofrepparttar 141607 venture? Are regular management accounts to be provided? For example, would have rights to a product developed by a JV partner, even if we had no direct involvement inrepparttar 141608 day-to-day running ofrepparttar 141609 venture? What about independent auditing?

11. Profit sharing. How are profits to be distributed? When? Under what conditions? Can one party force a distribution of profits?

12. IPR. What Intellectual Property Rights willrepparttar 141610 new venture acquire? DO they revert to any particular party ifrepparttar 141611 venture is dissolved? Who owns new IPR developed byrepparttar 141612 venture?

13. Employees. How many employees will be needed, and how will they be organized? Will there be share options, or other incentives? Transferring employees from one business to another will almost certainly involve you in taking legal advice onrepparttar 141613 process andrepparttar 141614 related employee rights. At we would always have relevant 'key-man' insurance policies in place for special employees.

14. Administration. Map out who managesrepparttar 141615 venture, whorepparttar 141616 bankers will be, who will auditrepparttar 141617 business and who is responsible for regulatory compliance?

15. Exit. Doesrepparttar 141618 venture have a defined life-span, or is it open-ended? What circumstances can force it to end prematurely? If this happens, how arerepparttar 141619 assets to be distributed (including cash and IPR). If there are liabilities, not assets, who do they devolve onto?

If you answer all these points adequately, you should be well onrepparttar 141620 way to a sensible well structured joint venture. As always, take legal advice before committing to any legal arrangement.

Jeff writes article on the day's legal issues for the public, and often contributes to website the free site for useful legal advice and tips.

Why You Need A Business Entity

Written by Richard A. Chapo

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In my opinion, it is better to have died a small child then be in a partnership. Unfortunately, many business owners form partnerships and donít even know it. This occurs when they go into business with another person. If no business entity is formed,repparttar law considersrepparttar 141402 business to be a partnership and treats it accordingly.

Partnerships are dangerous for one primary reason: a partnership does not provide any protection from liability and, in many ways, invites personal liability. Under well-established law, most partnerships are classified as "general". This simply means that allrepparttar 141403 partners are contributing torepparttar 141404 administration and running ofrepparttar 141405 partnership business. This classification can have grisly results.

In a general partnership, each partner is jointly liable forrepparttar 141406 debts of any other partner arising fromrepparttar 141407 business. For instance, you and your partner go to a business dinner with a client. Your partner has a drink and then a few more. They then get into an accident onrepparttar 141408 way home. Each ofrepparttar 141409 partners is liable forrepparttar 141410 damages claimed byrepparttar 141411 injured people. That means YOU! Even if you were not inrepparttar 141412 car, did not rentrepparttar 141413 car, never sawrepparttar 141414 car and don't drink!

Partnerships are a recipe for disaster. Stay away from them whenever possible.

Limited Partnerships

Limited Partnerships ["LP"] are perhapsrepparttar 141415 most misunderstood business entity. A limited partnership is similar to a general partnership, but allows a number ofrepparttar 141416 partners to limit their liability by being limited partners. It is critical to note that these limited partners are restricted to simply making a capital [cash, content, equipment] contribution torepparttar 141417 partnership. They cannot be involved in actively runningrepparttar 141418 business. If they are, they lose any protection from partnership debts. Many limited partnerships end disastrously. If you are married torepparttar 141419 idea of pursuing a limited partnership, you must do so in combination with corporations. That particular strategy is well beyondrepparttar 141420 scope of this article, but feel free to contact me if you wish to pursue a limited partnership.

Business owners should protect themselves by forming entities for their business activities. The real issue is identifyingrepparttar 141421 structure that is best for your particular situation.

Richard A. Chapo is with - This article is for information purposes only. Nothing in this article is intended to address the readerís specific situation nor does it create an attorney-client relationship.

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