The parties to a Joint Venture Agreement should have charitable purposes which are similar. The constating documents of both parties should be reviewed by counsel to ensure this similarity exists.
Key provisions that must be included in a Joint Venture Agreement are:
Management Committee: The agreement should set out the rights of each party contributing to the activities of the Joint Venture to appoint representatives to a governing body. The rights and duties of the management committee should be clearly outlined, and should include:
Keeping proper records;
Keeping proper financials;
Prepare a budget for approval by the various parties;
Identify projects; and
Monitor project progress.
Voting Control: Some agreements provide for voting rights in proportion to the respective contributions of the parties. Many agreements require that all issues are to be determined by a 2/3 majority vote.
Meetings of Management Committee: This item covers notice requirements, frequency of meetings, and electronic meeting options.
Reporting Obligations: this provides that the minutes of the meetings are to be forwarded to the parties.
Financial Statements: Financial statements should be provided to all parties, including disclosure of all funds received and how they were disbursed..
Term: A provision that sets out how and when the Joint Venture is terminated.
Financial Arrangements: The manner in which capital assets are to be contributed should be included.
Liability: When possible, the consequences and costs of inappropriate misconduct of one party should be attributable to that party only and should not implicate the partners to the Joint Venture.