Joint Venture Formation Checklist

Document type: Checklist Practice area: Corporate — Joint Ventures and Alliances Jurisdiction: United States, with cross-border notes Last reviewed: 5 September 2026

Section 1 — Threshold decisions

Articulate what the venture does that neither party can do alone. Record the answer; it drives scope, non-competes, and antitrust.
Decide entity versus contract. Document the reasons.
Select the vehicle (Delaware LLC default; corporation or LP by exception) and record why.
Confirm tax treatment desired by each party and whether any election is needed.
Confirm consolidation and accounting treatment each parent expects (equity method, proportionate, or consolidation) — this affects governance design.
Identify the venture's name and clear it for trademark availability in relevant jurisdictions.
Set the target timetable, working backward from any regulatory clearance lead time.

Section 2 — Term sheet terms that must be settled

Scope of business, defined by product, application, market, and territory
Contributions by each party, itemized
Agreed value of each contribution and the methodology
Ownership percentages
Board size, appointment rights, chair, and any independent manager
Reserved matters list and vote required for each
Budget approval mechanism and the fallback if no budget is approved
Capital: committed amounts, call mechanics, and consequences of non-funding
Distribution waterfall, including mandatory tax distributions
IP: assigned or licensed; field; territory; exclusivity; sublicensing; improvements; survival on exit and termination
Non-compete scope and duration for each party
Transfer restrictions, ROFO/ROFR, tag, and drag
Exit triggers, mechanism, and valuation standard including whether discounts apply
Term, termination events, and unwind principles
Governing law, dispute resolution, and (cross-border) arbitral seat

Section 3 — Contribution documentation

Contribution agreement drafted with representations and warranties on contributed assets
Schedule of contributed assets, itemized to transferable specificity
Schedule of assumed liabilities and excluded liabilities
Indemnification, survival periods, caps, and baskets
Third-party consents identified, with owner and deadline for each
Real property: deeds, leases, surveys, title, environmental reports
Equipment: bills of sale, liens released, condition confirmed
Contracts: assignment and assumption agreements; anti-assignment clauses reviewed
Permits and licenses: transferability confirmed; interim arrangements if not transferable
Built-in gain analysis completed for appreciated contributed property
Capital account opening balances agreed

Section 4 — Intellectual property

Ownership of each contributed IP asset verified (chain of title, employee assignments, contractor agreements)
Upstream license restrictions checked — especially sublicensing consent requirements in university or third-party licenses
Assignment documents in recordable form prepared for assigned IP
License agreement drafted with field, territory, exclusivity, sublicensing, term
Improvements addressed: ownership, grant-back, duration
Survival on exit expressly addressed
Prosecution responsibility, cost sharing, and control allocated
Enforcement rights, cost sharing, and recovery allocation agreed
Source code escrow established, if applicable, with release conditions
Trademark license with quality control provisions, if the venture uses a parent mark
Freedom-to-operate review for the venture's planned products

Section 5 — Constitutional documents

Certificate of formation filed
LLC agreement covering: members, units, capital accounts, allocations, distributions, governance, reserved matters, transfer restrictions, exit, dissolution, indemnification, and express fiduciary duty modifications
Confirm the implied covenant of good faith and fair dealing is not purported to be waived
Delegation of authority matrix adopted
Officer appointments and authority resolutions
Indemnification and advancement provisions for managers and officers
D&O insurance bound before the first board meeting
Books and records provisions, including what each member may inspect

Section 6 — Commercial agreements with parents

Supply agreements (each direction), with pricing methodology and term
Distribution or offtake agreements, with commitments and remedies
Shared services agreements (IT, HR, finance, facilities, legal), with pricing methodology, service levels, audit rights, and termination
Manufacturing or tolling agreements
Benchmarking provision for shared-service pricing
Transition services agreement for the ramp-up period
Confirm the aggregate effect: model the venture's P&L with all parent agreements in place and confirm it matches the agreed economics

Section 7 — People

Master secondment agreement with per-employee schedules
For each secondee: who directs work, cost reimbursement, benefits, invention assignment to the venture, confidentiality, term, and return
Direct-hire employment agreements and offer templates
Equity or phantom equity plan, with valuation methodology
Confidentiality and invention assignment agreements running to the venture
Permanent establishment analysis for cross-border secondments
CEO appointed before closing

Section 8 — Regulatory and antitrust

HSR analysis completed at term sheet stage; filing prepared if reportable
Substantive antitrust assessment if the parties compete: scope, ancillary restraints, information flows
Information protocol drafted and adopted, with three tiers and technical enforcement
Clean team established for any pre-closing diligence
Sector-specific approvals identified with lead times (utility, banking, insurance, gaming, health, FCC, foreign investment)
Interim operating arrangement documented if venture licenses cannot be obtained by closing
Foreign investment screening analysis where a non-US partner participates
Export control and sanctions screening for contributed technology and planned markets

Section 9 — Compliance infrastructure

Code of conduct adopted
Anti-corruption policy, third-party diligence procedure, and audit rights over intermediaries
Antitrust training for board, management, and all seconded staff
Data protection assessment and any required agreements between the venture and parents
Insurance program placed in the venture's own name (general liability, property, product, cyber, D&O)
Confirm parents' policies neither silently cover nor silently exclude venture operations

Section 10 — Launch and first hundred days

Organizational board meeting held; minutes recorded
Initial budget adopted
Bank accounts opened; treasury and signature authority established
Separate accounting system and general ledger stood up (not a parent's)
Separate email, systems, and access controls implemented
Reporting calendar circulated: monthly accounts, quarterly board, annual budget with fallback dates diarized
Customer pipeline activated; first commercial contracts in progress
Auditor engaged directly by the venture
Compliance training delivered and certifications collected
Unwind protocol drafted and filed with the constitutional documents

Section 11 — Workstream ownership matrix

Assign a named owner and a due date to each workstream at kickoff. Ventures fail on formation because a workstream had no owner, not because it had no checklist.

Workstream	Typical owner	Starts	Common failure
Term sheet and deal terms	Corporate lead, both sides	Day 1	Deferring exit and IP survival
Entity formation and constitutional documents	Corporate counsel	Week 2	Drafting governance before commercial terms are known
Contribution documentation	Corporate + specialist counsel	Week 2	No representations on contributed assets
Intellectual property	IP counsel	Day 1	Upstream license restrictions found late
Commercial agreements with parents	Business leads + commercial counsel	Week 3	Negotiated after ownership is fixed, moving the economics
Antitrust and HSR	Antitrust counsel	Day 1	Filing analysis done at signing, adding 30+ days
Tax structuring	Tax counsel	Day 1	Built-in gain and distribution consequences discovered after closing
Regulatory approvals	Regulatory counsel + business	Week 1	Licence lead times not on the critical path
Employment and secondment	HR + employment counsel	Week 3	Invention assignment gaps for secondees
Systems, data, and IT separation	IT leads	Week 2	Venture launches on a parent's ERP
Insurance	Risk management	Week 4	Gap between parent policies and venture operations
Launch and first hundred days	Venture CEO	Week 6	No CEO appointed until after closing

Section 12 — Pre-signing red flags

Stop and reassess if any of the following is true. Each has ended ventures after closing, at far greater cost than a delay would have caused.

A contributed licence prohibits sublicensing without a third party's consent that has not been obtained. The venture's core asset is revocable.
The parties cannot agree what happens if the venture needs money and one party will not fund. This is the most common real dispute and it has no natural default.
The budget requires unanimous approval with no fallback. One party can shut the venture down at will.
The exit mechanism cannot be funded by either party. It is not an exit; label it a forced sale and design accordingly.
The IP licence terminates on the licensor's exit. The licensor holds a permanent option over the venture's value.
A regulatory licence the venture needs is non-transferable and no interim arrangement is documented.
The parties compete and no information protocol exists. Both an antitrust exposure and a commercial one.
Nobody has modelled the venture's P&L with all parent commercial agreements in place. The ownership split may not match the actual economics.
No CEO has been identified. A venture without a leader on day one will be run by whichever parent shows up.