Free Joint Venture Checklist

Written by Jefferson Highway, General Counsel

Oftentimes, you may have a need to set up a 'joint venture' with a third party. These collaborative businesses can be extremely profitable for all parties involved, but you must ensure onrepparttar way in to such an agreement that you have done your due diligence, and that everyone understands exactly whatrepparttar 141603 terms and conditions ofrepparttar 141604 venture are.

For this reason, we here at have put together a quick 15 point checklist that will help you determine that you have allrepparttar 141605 bases covered. This is more important than you may think - after all, mid venture is NOTrepparttar 141606 time to be arguing about basic terms and conditions!

1. Identity. Confirm in writing exactly who is involved inrepparttar 141607 joint venture.

2. NDA. Do you need a Non Disclosure Agreement to be signed? (typically if one party has a great idea, andrepparttar 141608 other will be involved with manufacture or promotion).

3. What arerepparttar 141609 responsibilities of each party? List in writing what each of you will bring torepparttar 141610 'party'.

4. Isrepparttar 141611 enterprise global, or limited in geographical scope?

5. Are there any legal considerations related to setting uprepparttar 141612 business (are licenses required fromrepparttar 141613 Government etc)

6. Structure ofrepparttar 141614 joint venture. Is it a partnership or a Company, or simply a JV contract between 2 parties? If it is a company, who sits onrepparttar 141615 board and how are they appointed? What classes of shares are in circulation, and under what conditions? How are minority shareholders protected?

7. Financing. Who suppliesrepparttar 141616 capital forrepparttar 141617 venture? Is it split in some way betweenrepparttar 141618 Joint Venture parties or does it come from an outside source, such as a Bank or venture capital firm? Isrepparttar 141619 investment in cash or goods or services?

8. If a Company structure is to be used, what exit provisions are needed? For example, if one side wanted to sell their shares, what conditions apply? Willrepparttar 141620 other party have first refusal to buy? Can they also demand to be bought out atrepparttar 141621 same time? How is a shareholding to be valued? Will new incoming shareholders haverepparttar 141622 same rights and responsibilities asrepparttar 141623 existing shareholders? Is there a right of veto?

Why You Need A Business Entity

Written by Richard A. Chapo

When starting or expanding a business, many owners wonder if they should form a business entity and, if so, which one they should use. There is a wide variety of information and "pitches" being made onrepparttar Internet regardingrepparttar 141402 benefits of certain entities versus others. When you cut throughrepparttar 141403 flak, however,repparttar 141404 primary reason for forming a business entity is to create protection from personal liability arising from your business activities.

It is well established that up to eighty percent of businesses will fail in their first two years. Many of these businesses, and probably yours, carry a high level of personal risk for their owners. If you are not usingrepparttar 141405 correct entity for your particular business, you are going to be personally liable ifrepparttar 141406 business fails. Do you want to expose your home, car and other assets? How aboutrepparttar 141407 assets owned by your spouse or their paycheck from a regular job? Selectingrepparttar 141408 correct entity for your business prevents such nightmares from occurring. More importantly, you can sleep at night knowing thatrepparttar 141409 worst thing that can happen is losing your investment inrepparttar 141410 business, not your home.

Business Structures

There are a number of business structure options that exist inrepparttar 141411 modern corporate world. Following is a short explanation ofrepparttar 141412 most common business structures.


Corporations come in two basic forms, a "C" corporation and an "S" corporation. There are a variety of differences, butrepparttar 141413 central one is a tax issue. Briefly put, "C" corporations are taxed on their revenues and you are then taxed separately on any money you take out ofrepparttar 141414 corporation. An "S" corporation “passes through” all taxes torepparttar 141415 shareholders withrepparttar 141416 information being reported on your personal tax returns.

Regardless ofrepparttar 141417 tax classification, a corporation is considered an independent entity from a legal standpoint. This independent status acts as a shield betweenrepparttar 141418 activities ofrepparttar 141419 business and your personal assets. As a practical example, Kmart recently filed bankruptcy. The individual shareholders were not required to file bankruptcy and lost nothing more than their investment inrepparttar 141420 stock ofrepparttar 141421 company. Forming and using a corporation for your business activities will haverepparttar 141422 same effect, to wit, your personal assets will not be wiped out ifrepparttar 141423 business fails.

Limited Liability Company

A limited liability company, or "LLC" as it is better known, was a very popular entity choice inrepparttar 141424 early 1990s. LLCs are similar to corporations, but can be taxed as a partnership. In California,repparttar 141425 LLC can have either one owner or two. Regardless ofrepparttar 141426 number, these owners carryrepparttar 141427 legal title of "member.” The LLC provides a shield for your personal assets just like a corporation.

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