Game Winning Strategies to Ensure Your JV Performs at the Varsity Level

by Baker Donelson

Although the air may not be cool and crisp yet, it is August, and in the South, that means football season is just around the corner.  Perhaps it is “football brain” that drove our thoughts in presenting recommendations for creating and running a successful joint venture (“JV”), resulting in the analogies discussed below.  However, we believe it is more than that.  A successful joint venture, much like a successful football program, requires thoughtful planning during the inception phase, strong leadership with well-defined roles, and careful risk management. Coin-toss, kick-off, and read on to learn effective ways to make your JV perform like it is playing on the varsity team.

1. Get In Formation.

A JV may be created informally through oral agreements or through conduct of the entities involved.  Even if the entities did not intend to create a JV, in those instances, both JV partners will be liable for the other’s actions.  The better practice is to enter into a formal JV agreement any time your company engages in conduct that could arguably be seen as a joint engagement with another company.

Formal JV agreements, clearly defining the material terms, allow clarity at the inception of the project and later should any problems arise.  Federal government contracts require that JV agreements are in writing, and that each participant sign the contract and all bid documents.  In further example, forming the JV prior to bidding on government jobs is a necessity; creating a JV after a bid is awarded will invalidate the award because the JV would create a distinct legal entity from the bidding entity.

It is also important to determine the corporate structure best suited for the JV — such as contractual, corporation, LLC, partnership, or limited partnership.  This selection depends on the tax implications for all entities involved, liability and risk tolerance of the participants, complexity of the project, size of the participating entities, and Disadvantaged Business Enterprise (“DBE”) participants and requirements. Unless otherwise defined, JVs are usually treated as general partnerships.  In those instances, all participating entities will be responsible for the actions and conduct of the other JV entities.  Defining the JV otherwise is preferred to limit the liability of all JV members, but it must be done through a formal agreement.

2. Who Is Calling The Plays?

Football games become a mess when the offensive coordinator, special teams and head coach get their wires crossed about who is handling what, and leadership of a JV is no exception.  The JV Agreement should define the roles, responsibilities, and decision-making ability of each entity forming the JV.  The project will be disjointed, and the schedule may be affected, if the members of the JV cannot agree on how to make decisions affecting the project and there is no mechanism in place for determining how critical path items will be decided.

Also, most government projects require that a DBE JV member assert majority control of the JV.  If not, there is a chance the JV will lose the opportunity to bid or win public work.  During the formation process, these types of requirements must be considered and addressed to ensure that the JV is able to procure its intended project.

3. Staying Off The Injured Reserve.

The JV may have been necessary to win the work, bond the project, or adequately manage the construction process.  A well-documented JV agreement will likely provide the most protection for the additional risks associated with the JV as discussed above.  The agreement should also include a dispute resolution plan for managing the JV among the entities forming the JV.  Further, it is imperative that all members of the JV be included as named insureds on the JV’s commercial general liability (CGL) insurance policy.  Most CGL policies contain an exclusion for liability that is arising out of the conduct of any partnership or JV of which the insured is a party or member.  In short, JV entities not listed are not covered.

4. Team Roster.

Staffing the JV is fundamental to the successful completion of the project.  However, this can create additional liabilities.  It must be clear that the employee is working for the JV, not the individual entities forming the JV.  Best practices include having the employees who will work on the JV fill out new employment paperwork, such as I-9s, W-2s, etc., the distribution of company policies, handbook, and other company documents containing the JV name and logo, and employee e-mail addresses, accounts, and signature lines should identify the JV entity.  Paychecks should be issued through the JV, and paystubs should be written from the JV account on JV checks (whether paper checks or electronic deposit).  The human resource departments of the JV members should be involved in integration to ensure that the JV workforce is trained on their roles within the JV.

Game On!

The JV Agreement, or playbook, has been signed, managerial roles defined, liabilities accounted for, and the starting players selected – you are ready to drive down the field for a successful project.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Baker Donelson | Attorney Advertising

Written by:

Baker Donelson

Baker Donelson on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.