Aimee B. Davis Law P.C.

To Jointly Venture or Not?

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{4 minutes to read} When I was a junior associate working in BIG law firms, I wondered when I’d have enough corporate transactional experience to confidently advise clients how to structure their complex commercial deals. Fast forward nearly 30 years, and I continue to learn that things are not always clear-cut.


In 2021, I launched a new website for Aimee B. Davis Law P.C. My web developer, Juan Vides made me think about and draft content describing my various practice areas and the corporate legal services I’ve provided as a solo for a decade.

Bright 3d arrows in merging

Through this process, I realized that the documentation and processes necessary to effectuate a merger transaction (M&A) are similar to those needed to create a joint venture (JV). The primary difference between an M&A and JV deal is that in a JV, the participants don’t acquire full ownership of the target.


What are the differences between entering into a formal JV versus a contractual Strategic Alliance? In practice, these terms are often misused.


Joint Ventures involve the creation by two or more companies (Participants) of a separate legal entity (often an LLC), for a mutually beneficial project, with each Participant retaining its own independent legal entity. JVs are generally characterized by shared ownership, in exchange for each Participant’s contribution of assets and/or services, shared risks and returns, and shared governance. Participants typically pursue JVs for one of four reasons:

  1. To access a new market;
  2. To gain scale efficiencies by combining assets and operations;
  3. To share risk for major investments or projects; or
  4. To access skills and capabilities.


Strategic Alliances are relationships between two commercial entities, usually formalized by one or more business contracts. Also known as a “strategic partnership”, these deals don’t include the formation of a legal partnership, entity, agency, or corporate affiliate relationship. It’s a business arrangement to engage in a mutually beneficial project, with each party retaining its independence. The alliance is a cooperation or collaboration, aiming for synergy, where each partner hopes to achieve a greater benefit than those from individual efforts. The agreement is less complex and less binding than a JV in which the Participants pool resources to create a separate legal entity.


A couple of years ago, I recommended that a client consider entering into a JV, and I received quite a bit of pushback. That deal ultimately crumbled, but I’ve given consideration as to why the general counsel told me “for business reasons, we don’t want to structure it like that.”


Clearly, there are costs associated with creating a JV, including setting up a separate entity. There’s also the permanence that comes with formalizing the arrangement. As such I wouldn’t recommend a JV for a short-term project. Depending on the size of the deal, there may also be disclosure requirements if a Participant is a publicly traded company.


In this case, my client’s predecessors often entered into JV transactions. Over the years, I’ve noticed this client seems motivated to eliminate JV partners whenever the opportunity arises.


What I’ve learned is that even if a JV seems like a cleaner, more straightforward legal structure for a particular transaction, there still may be sound business reasons not to select one.


While a strategic partnership may require more than one contract to properly document the agreement of the parties, it’s good to remember, there’s often more than one way to skin the proverbial cat.

Aimee B. Davis Law P.C. is committed to advising its clients and resolving issues relating to the legal and business matters that are important to them. If you have any questions, please feel free to contact us at (917) 617-2243 or email

Aimee B. Davis Law P.C.

122 Ashland Place
Brooklyn, NY 11201