Joint Venture Agreement (New York)

JOINT VENTURE AGREEMENT (NEW YORK)

Drafted under the laws of the State of New York. This template assumes the parties will select either (i) a contractual joint venture governed by N.Y. Partnership Law as a matter of default, or (ii) a JV Entity organized as a New York limited liability company under the N.Y. Limited Liability Company Law (LLCL) or a New York corporation under the Business Corporation Law (BCL).

PRELIMINARY NEW YORK DRAFTING NOTES

1. Default partnership treatment. Under N.Y. Partnership Law § 10, "an association of two or more persons to carry on as co-owners a business for profit" is a partnership, even if the parties do not intend to form one. A contractual joint venture without a separate entity is analyzed under partnership law in New York; the parties owe each other statutory fiduciary duties of loyalty, care, and good faith under Partnership Law § 43 and Meinhard v. Salmon, 249 N.Y. 458 (1928) ("the punctilio of an honor the most sensitive"). Elect a New York LLC under LLCL § 203 if the parties wish to avoid open-ended partner liability.
2. LLCL § 206 publication. If the JV Entity is a New York LLC, the parties must cause publication of a notice in two newspapers designated by the county clerk of the county of the LLC's principal office for six consecutive weeks and file a Certificate of Publication with the NY Department of State within 120 days, or the LLC's authority to maintain actions in New York will be suspended.
3. Choice of law / forum. GOL § 5-1401 validates New York choice-of-law clauses for transactions of $250,000 or more even without a New York nexus; GOL § 5-1402 validates New York forum selection where the transaction involves $1,000,000 or more AND the parties have agreed to New York law AND a foreign party consents to NY jurisdiction.
4. Commercial Division. Disputes meeting the monetary threshold under 22 NYCRR § 202.70 (currently $500,000 in NY County for most commercial actions) may be heard in the Commercial Division, which has specialized JV and corporate-governance expertise.

1. DOCUMENT HEADER

THIS JOINT VENTURE AGREEMENT (this "Agreement") is made as of [__/__/____] (the "Effective Date") by and between:

(a) [________________________________], a [____________] [corporation / LLC / limited partnership] with its principal place of business at [________________________________] ("Venturer A"); and

(b) [________________________________], a [____________] [corporation / LLC / limited partnership] with its principal place of business at [________________________________] ("Venturer B", and together with Venturer A, each a "Venturer" and collectively, the "Venturers").

Recitals

A. The Venturers desire to combine specified resources, expertise, and capital to pursue the business opportunity described in Section 3.1 (the "Project") in the State of New York;

B. The Venturers intend that their relationship be governed by this Agreement and applicable New York law, and that any fiduciary duties owed between them be modified (to the maximum extent permitted by N.Y. Partnership Law § 121-110 / LLCL § 417) as expressly set forth herein;

C. The Venturers acknowledge that, absent election of a JV Entity, their association will be treated as a general partnership under N.Y. Partnership Law, with each Venturer jointly and severally liable for partnership obligations under Partnership Law § 26; and

D. The Venturers wish to define their rights, obligations, governance structure, economic sharing, and exit rights in a single written instrument.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, receipt of which is acknowledged, the Venturers agree as follows.

2. DEFINITIONS

"Act" means, if the Venturers elect to form a New York LLC as the JV Entity, the N.Y. Limited Liability Company Law; if a New York corporation, the N.Y. Business Corporation Law; and otherwise, the N.Y. Partnership Law.

"Commercial Division" means the Commercial Division of the Supreme Court of the State of New York as constituted under 22 NYCRR § 202.70.

"Confidential Information" has the meaning in Section 8.1.

"Department of State" means the New York State Department of State, Division of Corporations.

"JV Entity" means, if elected pursuant to Section 3.2, the New York [LLC / corporation / limited partnership] formed to conduct the Project.

"Meinhard Duty" means the heightened fiduciary duty of utmost good faith, loyalty, and candor that joint venturers owe each other under Meinhard v. Salmon, 249 N.Y. 458 (1928), as modified by this Agreement to the fullest extent permitted by LLCL § 417(d) or Partnership Law § 121-110.

"NY DOS" means the New York State Department of State.

"Percentage Interest" means each Venturer's proportional economic interest set forth on Schedule A.

"Project" has the meaning in Section 3.1.

"Supermajority Matter" has the meaning in Section 5.3.

3. FORMATION AND PURPOSE

3.1 Purpose of the Project

The Venturers form this Joint Venture to: [________________________________].

3.2 Form of the Joint Venture (elect one)

☐ (a) Contractual Joint Venture. The Venturers will operate as an unincorporated contractual joint venture governed by this Agreement and, as a default, by the N.Y. Partnership Law. The Venturers acknowledge that under Partnership Law § 26, each general partner is jointly and severally liable for the debts and obligations of the partnership and consent to such liability.

☐ (b) New York LLC. The Venturers will form a New York limited liability company under LLCL § 203 to hold and operate the Project. The Venturers will cause Articles of Organization to be filed with the NY DOS, and will satisfy the publication requirement of LLCL § 206 within 120 days after formation by publishing in two newspapers designated by the county clerk for six successive weeks and filing a Certificate of Publication with the NY DOS. This Agreement shall serve as the operating agreement required by LLCL § 417.

☐ (c) New York Corporation. The Venturers will form a New York business corporation under BCL § 402 to hold and operate the Project, and will enter into a shareholders' agreement consistent with this Agreement and BCL § 620.

3.3 Principal Office

The principal office of the Joint Venture shall be located at [________________________________], in the County of [____________], State of New York.

3.4 Term

The Joint Venture shall commence on the Effective Date and continue until dissolved pursuant to Section 12, provided that any contract/tort claims under this Agreement remain subject to the six-year statute of limitations under CPLR § 213(2).

4. CAPITAL CONTRIBUTIONS

4.1 Initial Contributions

Each Venturer shall contribute the cash, property, or services described on Schedule A on or before [__/__/____]. Non-cash contributions shall be valued at the amounts shown on Schedule A, which the Venturers agree represent fair market value.

4.2 Additional Capital Calls

The managing body may issue additional capital calls upon [____] days' prior written notice. A Venturer that fails to fund a call within the notice period shall be a "Defaulting Venturer" and shall be subject to the remedies in Section 11.4, which (consistent with Appleton Acquisition, LLC v. National Hous. Partners, 22 N.Y.3d 529 (2013), and other NY precedent on dilution remedies) shall include dilutive conversion at the election of the non-defaulting Venturer.

4.3 No Interest on Capital

No interest shall accrue on capital contributions except as expressly set forth on Schedule A or elected by unanimous written consent.

4.4 Withdrawal of Capital

No Venturer may withdraw capital except upon dissolution and winding up or as unanimously approved.

5. GOVERNANCE AND MANAGEMENT

5.1 Management Committee

The Joint Venture shall be governed by a Management Committee of [____] members. Each Venturer shall appoint members in proportion to its Percentage Interest (rounded to the nearest whole number).

5.2 Voting; Quorum

A quorum requires the presence of at least one representative of each Venturer. Ordinary decisions require a simple majority of the Management Committee.

5.3 Supermajority Matters

The following "Supermajority Matters" require the unanimous written consent of all Venturers:

☐ Amendment of this Agreement or the JV Entity's organizational documents;
☐ Issuance of additional equity or admission of a new Venturer;
☐ Sale of all or substantially all assets (triggering BCL § 909 if the JV Entity is a NY corporation, requiring two-thirds shareholder approval);
☐ Any merger or consolidation (BCL Art. 9 / LLCL Art. 10);
☐ Voluntary dissolution or filing for bankruptcy;
☐ Incurrence of indebtedness exceeding $[____________];
☐ Any related-party transaction exceeding $[____________] (subject to BCL § 713 / LLCL § 411 conflict-of-interest rules);
☐ Any transaction that would trigger appraisal rights under BCL § 623 or § 910.

5.4 Deadlock

If the Management Committee is deadlocked on any matter for [____] consecutive meetings, any Venturer may trigger the buy-sell procedure on Schedule B. The Venturers acknowledge that BCL § 1104 permits judicial dissolution of a NY corporation upon deadlock, and LLCL § 702 permits judicial dissolution of an LLC when it is "not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement" (In re 1545 Ocean Ave., 72 A.D.3d 121 (2d Dep't 2010)).

5.5 Modification of Fiduciary Duties

To the maximum extent permitted by LLCL § 417(d) and N.Y. Partnership Law § 121-110, the Venturers agree that the Meinhard Duty is modified as follows: (a) each Venturer may pursue business opportunities outside the scope of the Project defined in Section 3.1 without accounting to the other; (b) the duty of care is limited to acts or omissions not constituting gross negligence, willful misconduct, or knowing violation of law. The covenant of good faith and fair dealing implied in every New York contract under 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144 (2002), may not be waived.

6. CAPITAL ACCOUNTS, ALLOCATIONS, AND DISTRIBUTIONS

6.1 Capital Accounts

If the JV Entity is taxed as a partnership, capital accounts shall be maintained in accordance with Treas. Reg. § 1.704-1(b)(2)(iv).

6.2 Allocations

Profits and losses shall be allocated pro rata in accordance with Percentage Interests, subject to Section 704(b) and (c) of the Internal Revenue Code.

6.3 Distributions

Available cash shall be distributed to the Venturers in proportion to Percentage Interests at times determined by the Management Committee, subject to reasonable reserves and to the restrictions on distributions under LLCL § 508 (NY LLCs may not distribute if the distribution would render the company insolvent) or BCL § 510 (corporate dividends).

6.4 Tax Distributions

The Joint Venture shall make quarterly tax distributions sufficient to cover each Venturer's estimated federal, New York State, and New York City tax liability at the highest applicable marginal rate, considering New York State personal income tax (N.Y. Tax Law § 601) and, where applicable, New York City unincorporated business tax (NYC Admin. Code § 11-503).

7. REPRESENTATIONS AND WARRANTIES

Each Venturer represents and warrants as of the Effective Date:

(a) Organization. It is duly organized and validly existing under the laws of its jurisdiction of formation and, if applicable, is authorized to do business in New York under BCL § 1304 or LLCL § 802;

(b) Authority. Execution and performance of this Agreement has been duly authorized;

(c) No Conflict. Execution does not violate any organizational document, material contract, or New York or federal law (including the NY Martin Act, GBL Art. 23-A, if securities are being offered);

(d) No Litigation. Except as disclosed on Schedule C, there is no litigation pending or threatened that would materially affect such Venturer's ability to perform;

(e) Not a Bad Actor. Neither such Venturer nor its control persons is subject to "bad actor" disqualification under Rule 506(d) or is a "covered person" under SEC regulations or NY GBL § 352-c.

8. CONFIDENTIALITY; INTELLECTUAL PROPERTY; RESTRICTIVE COVENANTS

8.1 Confidentiality

"Confidential Information" means all non-public business, financial, technical, and strategic information disclosed in connection with the Project. Each Venturer shall: (a) use Confidential Information solely for Project purposes; (b) protect it with at least the same degree of care used for its own similar information, but in no case less than reasonable care; and (c) disclose it only to Representatives with a need to know. These obligations survive for [____] years after termination, provided that trade secrets remain protected for so long as they qualify as trade secrets under New York common law (New York has not adopted the Uniform Trade Secrets Act; see Faiveley Transport Malmo AB v. Wabtec Corp., 559 F.3d 110 (2d Cir. 2009), and Ashland Mgmt. v. Janien, 82 N.Y.2d 395 (1993)).

8.2 IP Ownership

Intellectual property developed exclusively for the Project shall be owned [jointly / by the JV Entity]. Background IP owned by a Venturer prior to the Effective Date remains the property of that Venturer, and a non-exclusive license for Project purposes is hereby granted.

8.3 Non-Competition

During the term of the Joint Venture and for [____] months thereafter, no Venturer shall, within [geographic area], engage in any business directly competitive with the Project. The Venturers acknowledge the BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999), reasonableness test: any restrictive covenant must be (i) no greater than required to protect the legitimate interests of the benefited party, (ii) not unduly burdensome, and (iii) not harmful to the public. The Venturers further acknowledge the pending N.Y. Senate Bill S4641 (2025-2026 session) which, if enacted, would limit non-competes to highly compensated individuals earning $500,000+ and restrict duration to one year; this provision shall be deemed modified to comply with any future enacted restrictions.

8.4 Non-Solicitation

During the Joint Venture term and for [____] months thereafter, no Venturer shall solicit employees, customers, or suppliers of the Joint Venture, subject to the BDO Seidman limitation that employee non-solicits are enforceable only to the extent they cover employees with whom the solicited party had substantial client-facing contact.

8.5 Whistleblower Carve-Out (DTSA/N.Y. Labor Law)

Nothing in this Agreement prevents any Venturer or its employees from: (a) making disclosures protected under 18 U.S.C. § 1833(b) (DTSA whistleblower immunity); (b) reporting violations to the NY Attorney General, NY DFS, or the SEC; or (c) exercising rights under N.Y. Labor Law § 740 (whistleblower protection).

9. BOOKS AND RECORDS

9.1 Books and Records

The Joint Venture shall maintain books and records in accordance with GAAP at its principal New York office. Each Venturer has the statutory right of access under LLCL § 1102 (LLC) or BCL § 624 (corporation), which rights may not be waived.

9.2 Financial Reporting

The Management Committee shall deliver audited financial statements within [____] days after each fiscal year-end.

9.3 Tax Matters

The Joint Venture shall appoint a "partnership representative" under IRC § 6223 who shall be responsible for both federal and New York State tax proceedings. New York State taxes the JV Entity at the entity level where permitted under the NY Pass-Through Entity Tax (Tax Law Art. 24-A).

10. INSURANCE

The Joint Venture shall maintain: (a) commercial general liability insurance with minimum limits of $[____________] per occurrence; (b) if operations include New York employees, statutory New York workers' compensation coverage (Workers' Comp. Law § 10) and NY disability benefits coverage (Workers' Comp. Law § 202); (c) property insurance for Project assets; and (d) D&O coverage for the Management Committee members.

11. EVENTS OF DEFAULT AND REMEDIES

11.1 Events of Default

A Venturer is in default upon: (a) failure to fund a capital call within [____] days after notice; (b) material breach not cured within 30 days after written notice; (c) bankruptcy or insolvency; (d) assignment of its interest in violation of Section 13; or (e) material breach of Section 8 (confidentiality, IP, or restrictive covenants).

11.2 Remedies

The non-defaulting Venturer may, alternatively or cumulatively: (a) seek specific performance (available under NY law where monetary damages are inadequate); (b) seek injunctive relief (including under CPLR Art. 63 for preliminary injunction or CPLR Art. 75 for arbitration-related injunctive relief); (c) exercise buy-sell rights under Schedule B; (d) dilute the Defaulting Venturer's Percentage Interest; or (e) seek judicial dissolution under LLCL § 702 or BCL § 1104.

11.3 Prejudgment Interest

Any monetary award shall bear prejudgment interest at the statutory rate of 9% per annum under CPLR §§ 5001 and 5004, running from "the earliest ascertainable date the cause of action existed" per CPLR § 5001(b).

11.4 Attorneys' Fees

The prevailing party in any action to enforce this Agreement shall be entitled to recover reasonable attorneys' fees and costs. The Venturers acknowledge the Hooper Assocs. v. AGS Computers, 74 N.Y.2d 487 (1989), requirement that fee-shifting clauses be drafted with "unmistakable clarity," which clarity is intended here.

12. DISSOLUTION AND WINDING UP

12.1 Dissolution Events

The Joint Venture shall dissolve upon: (a) unanimous written consent; (b) entry of a decree of judicial dissolution; (c) sale of all or substantially all Project assets; (d) expiration of the Term, if any; or (e) a dissolution trigger set forth on Schedule A.

12.2 Winding Up

Upon dissolution, the Management Committee shall wind up affairs in accordance with LLCL § 703 or BCL § 1005, as applicable, and distribute proceeds: (i) first to creditors; (ii) second to establish reasonable reserves; (iii) third to Venturers in proportion to positive capital account balances.

12.3 Articles of Dissolution

The Management Committee shall file appropriate dissolution documents with the NY DOS and satisfy New York State and City tax clearance requirements under Tax Law § 1004 (sales tax clearance) where applicable.

13. TRANSFER RESTRICTIONS

No Venturer may sell, assign, pledge, or otherwise transfer any interest in the Joint Venture without the prior written consent of the other Venturer, which may be withheld in its sole discretion. Any purported transfer in violation is void ab initio. Transfers to wholly-owned affiliates are permitted subject to continuing joint and several liability of the transferor.

14. INDEMNIFICATION AND LIMITATION OF LIABILITY

14.1 Mutual Indemnification

Each Venturer shall indemnify the other against third-party claims arising from (a) breach of this Agreement, (b) gross negligence or willful misconduct, or (c) violation of law. This tracks the indemnification authority under LLCL § 420 or BCL § 722.

14.2 Limitation of Liability

Except for (i) indemnification obligations, (ii) fraud or willful misconduct, (iii) breach of confidentiality, and (iv) any matter for which liability may not be limited as a matter of New York public policy, each Venturer's aggregate liability is capped at $[____________]. The Venturers acknowledge that under Kalisch-Jarcho, Inc. v. City of New York, 58 N.Y.2d 377 (1983), and its progeny, limitation of liability clauses are generally enforceable in New York commercial contracts but will not bar recovery for gross negligence or willful misconduct.

14.3 No Consequential Damages

EXCEPT FOR THE CARVE-OUTS IN SECTION 14.2, NEITHER VENTURER SHALL BE LIABLE FOR INDIRECT, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES.

15. DISPUTE RESOLUTION

15.1 Governing Law

This Agreement and all matters arising out of or related to it shall be governed by the substantive laws of the State of New York without regard to its conflict-of-laws rules. The Venturers invoke N.Y. General Obligations Law § 5-1401 to the extent the aggregate value of this transaction meets or exceeds $250,000, and acknowledge that § 5-1401 permits New York choice of law regardless of any reasonable relation to New York.

15.2 Exclusive Forum

Subject to Section 15.3, all actions arising out of or relating to this Agreement shall be brought exclusively in: (a) the Commercial Division of the Supreme Court of the State of New York, County of [New York / ____________] (where jurisdiction exists under 22 NYCRR § 202.70); or (b) the United States District Court for the [Southern / Eastern] District of New York. The Venturers irrevocably consent to personal jurisdiction in such courts pursuant to N.Y. CPLR § 301 and § 302, and waive any forum non conveniens objection (foreclosed by GOL § 5-1402 for transactions of $1,000,000 or more).

15.3 Optional Arbitration

☐ The Venturers elect to resolve disputes by binding arbitration in [New York County], New York, under the Commercial Arbitration Rules of the American Arbitration Association, by a panel of [one (1) / three (3)] arbitrators. Any award may be entered in any court of competent jurisdiction, including under CPLR Art. 75.

☐ The Venturers elect NOT to arbitrate; disputes shall proceed exclusively in court.

15.4 Jury Waiver

THE VENTURERS KNOWINGLY WAIVE ANY RIGHT TO JURY TRIAL, CONSISTENT WITH N.Y. CPLR § 4102(c) WHICH PERMITS CONTRACTUAL JURY WAIVERS IN COMMERCIAL MATTERS.

15.5 Injunctive Relief

Notwithstanding Section 15.3, either Venturer may seek preliminary or permanent injunctive relief in aid of arbitration under CPLR § 7502(c) and in support of Section 8 (confidentiality/IP/restrictive covenants).

16. GENERAL PROVISIONS

16.1 Notices

Notices shall be delivered to the addresses in the preamble by: (a) hand delivery; (b) overnight courier; (c) certified mail, return receipt requested; or (d) email with confirmation. Notice by electronic means is effective under N.Y. State Technology Law Art. 3 (the Electronic Signatures and Records Act, or "ESRA"). The Venturers acknowledge New York is the only state not to have adopted UETA; ESRA (STL §§ 301-309) nevertheless gives electronic signatures the same force as manual signatures for all purposes except those excluded under STL § 307 (wills, testamentary trusts, negotiable instruments governed by UCC Art. 3, and certain court filings).

16.2 Entire Agreement; Amendment

This Agreement, together with all Schedules, constitutes the entire agreement and supersedes prior agreements. Amendments must be in writing and signed by all Venturers. No oral modifications are permitted, consistent with GOL § 15-301.

16.3 Severability

If any provision is held invalid, the remaining provisions remain in full force, and the invalid provision shall be reformed by the court (including the Commercial Division) to the extent permitted under BDO Seidman blue-pencil doctrine to effectuate the parties' intent.

16.4 Counterparts and Electronic Signatures

This Agreement may be executed in counterparts, including electronic signatures pursuant to N.Y. State Technology Law §§ 301-309 (ESRA) and 15 U.S.C. §§ 7001 et seq. (E-SIGN).

16.5 No Third-Party Beneficiaries

Except as expressly provided, there are no third-party beneficiaries to this Agreement.

16.6 Statute of Limitations

Claims arising under this Agreement are subject to the six-year statute of limitations for contract claims under CPLR § 213(2). Fraud claims are subject to the later of (i) six years from commission or (ii) two years from discovery, under CPLR § 213(8).

16.7 New York Publication Compliance

If a JV Entity is formed as a NY LLC, the parties shall jointly cause compliance with the publication requirement of LLCL § 206 and the filing of the Certificate of Publication within 120 days. Failure to comply will suspend the LLC's authority to maintain actions in New York until cured.

17. EXECUTION

IN WITNESS WHEREOF, the Venturers have executed this Joint Venture Agreement as of the Effective Date.

VENTURER A: [________________________________]

By: [________________________________]
Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

VENTURER B: [________________________________]

By: [________________________________]
Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

SCHEDULE A — CAPITAL CONTRIBUTIONS AND PERCENTAGE INTERESTS

SCHEDULE B — BUY-SELL / DEADLOCK PROCEDURE

[Texas shotgun / Russian roulette / independent appraisal procedure to be drafted]

SCHEDULE C — DISCLOSURES

[Pending litigation, conflicts, and other disclosures]

SOURCES AND REFERENCES

• N.Y. Partnership Law (N.Y. Cons. Laws PTR): https://www.nysenate.gov/legislation/laws/PTR
• N.Y. Limited Liability Company Law (N.Y. Cons. Laws LLC): https://www.nysenate.gov/legislation/laws/LLC
• N.Y. Business Corporation Law (BCL): https://www.nysenate.gov/legislation/laws/BSC
• N.Y. General Obligations Law § 5-1401: https://www.nysenate.gov/legislation/laws/GOB/5-1401
• N.Y. General Obligations Law § 5-1402: https://www.nysenate.gov/legislation/laws/GOB/5-1402
• N.Y. CPLR § 213, § 5001, § 5004: https://www.nysenate.gov/legislation/laws/CVP
• 22 NYCRR § 202.70 (Commercial Division Rules): https://www.nycourts.gov/LegacyPDFS/courts/comdiv/NY/PDFs/CDRules202-70.pdf
• N.Y. State Technology Law Art. 3 (ESRA): https://www.nysenate.gov/legislation/laws/STT/A3
• Meinhard v. Salmon, 249 N.Y. 458 (1928)
• BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999)
• Faiveley Transport Malmo AB v. Wabtec Corp., 559 F.3d 110 (2d Cir. 2009)
• In re 1545 Ocean Ave., LLC, 72 A.D.3d 121 (2d Dep't 2010)
• NY Senate Bill S4641 (2025-2026): https://www.nysenate.gov/legislation/bills/2025/S4641