A Teaming Agreement vs. a Joint Venture

Posted by Irv on January 17th, 2006

One way that businesses work together is through joint ventures (short-term partnerships for undertaking a specific project) with both businesses contributing assets and sharing both risk and profit. However, many smaller businesses avoid joint ventures because they involve some tricky legal issues, such as liability.

When one partner is large and the other small, or when both are small, the most common partnering arrangement is called a teaming agreement. And the most common form of teaming is subcontracting, through which one business serves as the prime contractor and one or more others serve as subcontractors.

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