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A group of people or businesses that want to partner up on a project or venture without having it affect their individual legal status file a joint venture (JV) agreement. The Joint Development Agreement establishes the parameters of shared effort, disparity, and makes it easier to include clauses for profit-sharing and enterprising operations. It also creates a binding contract between the two parties. Before entering into a joint development agreement, the parties involved typically create an MoU (Memorandum of Understanding).
A joint venture agreement enables a company to collaborate with another one while yet maintaining its own distinct legal identity. As a result, it is a minimum liability option for companies where 100% of FDI has been used.
Without experiencing any of the drawbacks associated with conducting business as a single entity, a joint venture agreement enables you to access new markets and resources while guaranteeing that the risk is shared.