Starting a business is a big decision. There is a wide range of legal considerations for you to take into account before deciding how to set up your business. In particular you will need to decide on an appropriate structure through which to operate your business. Not all business structures will meet your particular commercial needs and choosing an inappropriate structure can create barriers to your business success.

Once your business is established you may wish to team up with other businesses to make the most of opportunities in your particular market. There are many reasons that individuals or businesses may choose to work together to achieve a particular commercial goal. For example you may want to:

• increase your competitive advantage in a particular market;
• leverage the skills and attributes of another business for a particular joint project;
• grow and expand a certain aspect of your business without having to borrow additional funds;
• obtain access to specialist skills that would complement your own; or
• combine resources to explore the boundaries of your particular market.

Many Australian businesses are choosing to pursue such goals through participation in a joint venture. A joint venture is a relationship between two individuals or businesses that enter into an agreement to work alongside each other to achieve a common commercial goal while still remaining separate businesses. Usually joint ventures occur as a strategic partnership for the limited duration of a particular project. The idea behind a joint venture is that the commercial advantage of the two businesses combined is superior to that of each business operating independently. Mining and energy exploration projects are common examples of joint ventures in the Australian context.

Whether a joint venture structure is suitable for your particular project will depend on whether it meets your commercial needs, personal needs and taxation concerns. It will be important to consider:

• what kind of enterprise you are carrying on;
• the size of your business;
• your expectations of growth and expansion;
• whether your business operates on a project by project basis or ongoing supply;
• whether you employ people; and
• how to protect your personal assets from any business-related claims.

This Legal Guide on Joint Ventures provides information to help you decide whether a joint venture is the right business structure for your particular needs. Before making important decisions it is advisable to obtain legal advice specific to your situation. LegalEagle’s™ free directory profiles all lawyers in Australia. You can use it to Find a Lawyer near you.

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Warning: Information provided through LegalEagle™ is for general guidance. It is not legal advice. Laws and procedures referred to may change and differ between states, territories and nationally. There may also be important exceptions or qualifications. Only a lawyer providing formal legal advice can assess your particular circumstances to determine how the law will apply.