If you are thinking about starting a joint venture between your company and another entity, it is important to think about how it might work, particularly in terms of management and taxation. A joint venture is a kind of trade agreement in which two or more parties enter into an agreement to pool all their resources in order to achieve a specific objective. The goal can be a task, a new project or any form of business activity. All participants in a joint venture are responsible for all costs, benefits and losses. However, the company itself is completely independent of other companies in the party. When a joint venture fails, the loss of each party is limited to what it has invested. And, this means that creditors “don`t have the legitimate right to recover from one of the parent companies,” says Innova. A joint enterprise agreement defines the terms and obligations of the members and the joint venture. The other fundamental document to be articulated is that of articles that are a published document and that are known to members.

This is repeated as part of the shareholders` pact regarding the number of directors that each founder can appoint to the board of directors; Whether the board of directors or the founders; the simple majority decision (50%-1) of those present or of a majority of 51% or 75% for all directors present (their substitutes/alternates); Making company funds available The level of debt The share of profit that can be declared as a dividend; Etc. What is important is also what will happen if the business is dissolved, if one of the partners dies or if the business is sold. GuWs are not recognized by the IRS, where the joint venture agreement determines how taxes are paid. A joint venture is not required to register with a state or the federal government. In Ukraine, most joint ventures are operated in the form of a limited liability company[22] because there is no legal form as a joint venture. The protection of the rights of foreign investors is guaranteed by Ukraine`s “Foreign Investment” Law. In Ukraine, the joint venture can be created without legal training and under the cooperation agreement[23] (Dogovir pro spilnu diyalnist); Ukr.