Medford, OR asked in Business Law and Contracts for Oregon

Q: Simple JV agreement? or not.

Good morning,

I think this is a simpler question(s). Do you know if there is an easy way to write an agreement (what type of agreement) between an LLC and a private investor for a potential 1x project? The investor(s) assume the risk of loosing all their cash investment in return for a determined portion, both profits or losses, of the project in question.

If no simple agreement exists, would it be easier to form a new LLC with the investor(s) as members then create a joint venture 50/50 agreement between the new LLC and original LLC?

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1 Lawyer Answer
Daniel DiCicco
Daniel DiCicco
PREMIUM
Answered
  • Portland, OR
  • Licensed in Oregon

A: I don't think you have a simple option. Let's put it like this - when a real possibility exists that an investor's entire investment can evaporate, and then that eventuality comes to pass - people get mad. They start thinking of where things went wrong and while they may have seemed cool with it up front, when they still had all of their money, they may not be feeling so cool and calm about it after the fact.

This is where a proper, well-thought-out contract comes into play. What duties do the partners to this venture have? What is the exit scenario? There are so many considerations when creating a business fueled by investment funds that it would be unwise to try and make a DIY contract.

Bruce Alexander Minnick agrees with this answer

1 user found this answer helpful

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