Legal Options For Web Designers Wishing To Enter Into A Joint Venture
At some point in the life of their business, web designers might have the opportunity to enter into a joint venture with another business on a project for one or more clients. The nature of these joint ventures can differ considerably with examples being:
- Teaming up with another web designer to create a large, corporate website
- Working with a web design agency that requires the particular web design skills you have
- Collaborating with a digital marketing agency to add a new website to a client’s marketing funnel
Whether any of these or some other joint venture opportunity, one aspect constant in all of them will be the need for a joint venture agreement to be created and signed by both parties. There are three main types of joint venture agreements, which are incorporated, unincorporated, and unit trust, respectively. Below are explanations for each of these.
Incorporated Joint Venture Agreements
An incorporated joint venture agreement is used when the two parties to the joint venture do so by creating a new company. From a legal perspective, it is via this company that the joint venture will be pursued rather than through the respective existing businesses.
An incorporated joint venture agreement usually means that each party has an equal share of the business unless a differential has been agreed upon where the split is 60% to 40%, for example. In either case, a shareholder agreement will need to be signed by both parties.
An incorporated joint venture agreement offers web designers a greater level of protection as it is the new company to which liabilities will apply and not their existing business.
