International joint ventures, consortium agreements and other international business agreements enable businesses from different countries to cooperate and rapidly expand into new markets. Today, most businesses in the U.S. and beyond have arrangements with foreign entities. This is the case when sourcing a foreign product, manufacturing facility, contracting with foreign companies for services, consulting, brokerage, licensing intellectual property and others.
If you are doing business internationally or you are a foreign company interested in doing business in the United States, and work with international suppliers, customers, partners, or regulators, seek our advice before you enter into an international business agreement, including international joint venture agreement or consortium agreement. The international business arena requires companies to comply with the laws and regulations not only locally but also in the foreign country. Compliance with international laws and procedures can be cumbersome and issues that were never on anyone’s mind suddenly become central – which country’s courts can you access, what laws apply, what procedures apply and many others.
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Generally, a consortium or a joint venture is a strategic business association, combination or group of two or more entities or individuals formed to undertake an enterprise together. Both a consortium or joint venture can be used in any type of business transaction, including international business transactions and for any type of private or public projects. A consortium or joint venture is typically formed by contract – consortium agreement or joint venture agreement, respectively.
The joint venture can be a contractual arrangement between two or more joint venture partners, or it can be created by establishing a joint venture entity. Regardless of how the venture partners decide to form the joint venture, the relationship between them should always be governed by a definitive joint venture agreement outlining the essential terms of the overall relationship. After the partners reach a common understanding, all the business and legal issues surrounding their partnership are set out in a joint venture agreement signed by the partners.
However, consortium differs from joint venture. A consortium is an association of two or more individuals, companies, organizations or governments (or any combination) with the objective of participating in a common activity or pooling their resources for achieving a common goal. Companies in a consortium co-operate with one another, and share resources as needed. Within the consortium, each member is responsible to the group only in respect to the obligations set out in the consortium agreement, but aside from this each member of the consortium retains its separate legal status and remains independent. A consortium is not a merger and each participant carries on its normal business operation without any interference with another member’s business. A consortium’s control over each member is limited to the rights and obligations delineated in the consortium agreement.
We execute a wide range of international business contracts, international joint ventures and consortium agreements, and take into consideration US law, foreign law and international treaties and agreements.
Contact us, your international business in Florida, to help you execute an international joint venture or consortium agreement.