Drafting an Australian joint venture agreement
Joint ventures can be incorporated (using a JV company) or unincorporated (contractual). Unincorporated JVs are common in infrastructure and resources, and must be drafted to avoid being characterised as a partnership unless that is the client's intent.
This is an 8-step workflow for drafting an unincorporated joint venture agreement under Australian law — covering contributions, governance, profit sharing, and exit mechanics.
Before you start
- Commercial objectives and scope agreed in principle
- Participants and their contributions identified
- Tax structuring advice obtained
- Decision-making and governance expectations canvassed
The workflow
Define JV purpose and scope
Define the JV purpose, permitted activities, and any exclusivity. Set boundaries so activities outside the JV remain each participant's independent business.
Avoid partnership characterisation
Draft the agreement to reflect a tenancy in common rather than a partnership — each participant takes its share of product or revenue, not share of profits.
Contributions and participating interests
Document each party's contributions (cash, assets, IP, services) and the resulting participating interest. Address valuation and adjustment mechanisms.
Governance and decision-making
Draft the management committee structure, meeting procedures, quorum, voting thresholds, and reserved matters that require unanimous consent.
Operator, funding and cash calls
Appoint an operator (if applicable), set funding obligations, and draft the cash call and default dilution mechanics.
IP and confidentiality
Address ownership of background IP, JV-generated IP, and licences to participants on termination. Include confidentiality obligations during and after the JV.
Transfer restrictions and exit
Draft transfer restrictions, pre-emptive rights, tag-along, drag-along and deadlock resolution mechanisms. Include exit events and wind-up procedures.
CCA review and execution
Review the JV against the cartel provisions and JV exemption in the Competition and Consumer Act. Prepare execution blocks and any counterparts clause.
What you will have at the end
An executed joint venture agreement that documents contributions, governance, and exit mechanics, while avoiding unintended partnership characterisation and complying with the CCA.
Common issues
- Wording that creates a partnership rather than a JV
- Incomplete cash call and dilution mechanics
- Deadlock resolution clauses that do not work in practice
- Not addressing cartel exposure before signing
- Omitting default treatment of JV-generated IP
Run this workflow on a real matter
Quillio drafts the JV agreement and flags cartel, partnership and deadlock risks. See /practice-areas/commercial-lawyers or start a free trial.
This workflow is a general guide for unincorporated JVs. Incorporated JV structures require additional Corporations Act analysis.
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