What should a joint venture agreement between two Ontario businesses cover?

A joint venture isn't a defined legal structure in Ontario the way a partnership or corporation is — it's whatever the parties' contract says it is, which makes the agreement itself the most important document in the relationship. At minimum, it should clearly set out the venture's specific purpose and scope, each party's contributions (money, assets, services, or expertise), how decisions will be made and by whom, and how profits, losses, and costs are shared.

It should also address ownership of anything the venture creates, such as intellectual property or new assets, how liability to third parties is allocated between the parties, and what happens if one party wants to exit, the venture ends, or the parties disagree. One issue worth addressing explicitly is whether the parties intend to avoid being treated as a general partnership, since courts look at the substance of the relationship, not the label, when deciding whether partnership liability rules apply. Because a poorly drafted joint venture agreement can leave both businesses more exposed than they realized, this is worth having a lawyer draft or review before the venture starts operating.