Joint Business Ventures/Enterprises
A joint venture is a partnership of one or more sole proprietors, partnerships, corporations, or limited liability companies formed for the purpose engaging in a specific type of business. The most obvious advantage with a joint venture agreement is that a new business entity does not necessarily have to be created to effectuate the joint venture. Indeed, the requirements for a joint venture are extremely minimal. The disadvantage, however, is that because of the loose requirements there can be much confusion over the terms of the joint venture. What is the specific object to be achieved? How long does the venture last? Is liability which arises from the joint venture to be split evenly? The typical rule is that joint venturers are jointly and severally liable for torts committed within the scope of the joint venture. Firestone v. VanHolt, 186 S.W.ed 319, 324 (Mo. Ct. App. 2005). Who funds the joint venture? What are the limitations of the joint venture?
Often times determining whether a joint venture exists is problematic. The essential elements of a joint venture are (1) an agreement, express or implied, among the members of the group, (2) a common purpose to be carried out by the group, (3) a community of interests, among the group, in that purpose, and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control. Back v. Winfield-Foley Fire Protection District, No. ED 88734 (Mo. Ct. App. 2007).
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