Healthcare: Joint Venture Agreements
A joint Venture Agreement is used when business entities or individuals enter into a business relationship (joint venture) for the purpose of achieving a mutual goal. This agreement should set out the terms and obligations of members and the joint venture.
This type of agreement can allow both parties more financial or technical resources, greater expertise and skills, open up new markets, gain a larger capacity, and allow for diversification. However, especially in the healthcare field, there are legal requirements and restrictions that should be taken into account before they are enacted. Risks can include an imbalance in the relationship, different management or leadership styles, different cultural environments, poor planning and decision making, and possible misunderstandings.
How the agreement is structured can be critical to the success of the venture and should also consider the legal and compliance obligations of both parties. A joint venture should be a true partnership, providing higher profitability to both. Having an attorney on board to help with the agreement and provide counsel for its implementation will help the process go smoother.
Different states have different rules and regulations so a Joint Venture Agreement should be customized for the state it is being executed in and all parties, including physicians, should be aware of the terms and conditions of the agreement. Generally, the goal is to work with physicians, not compete with them. An alignment of goals for each will increase the success for everyone and your attorney can help this happen.