Joint Ventures

Joint Ventures & Handshake Business

By Rob Lambert - Email Editor - Editor Bio

Date : 11-Jan-2007

Dear Subscriber:

The promises on the Internet are big and achievable. A joint venture is your certified path to wealth.

And it doesn’t matter if:

You have no money to start with. …
You have no experience with Joint Venture deals. …
You don’t actually have a product or service to sell. …
You don’t consider yourself an “expert” in any particular topic. …
You don’t own a business. …
None of these things matter – as you shall soon see. …

Can you believe it?

This is straight from a website about joint ventures.

Joint Ventures – A business undertaking by two or more persons engaged in a single defined project.

Guys, wake up, this is a simple general partnership. A type of business organization which is the easiest to form and most dangerous of all.

When we hear the words “joint venture,” most of us think big business like the Dow Chemical case over the breast implants; two companies combining to create, develop, market and profit from a new product. However, the product was the leaky silicone breast implant and caused a 2.4B landslide of lawsuits. Dow Chemical had to absorb the liabilities of the lawsuit from the partner as the parent business and as the child business. Two solvent companies came together attempting to separate their liabilities and assets. The Dow Chemical company made a 50–50 joint venture attempting to shield the company from the liabilities and instead ended up as a co-conspirator.

Many experts would say that this layering is an attempt to protect the parent company, which is the asset holder in this case. However, the technique that seemed so philosophically sound offered no protection. If you apply this to your personal liability situation, perhaps you will see that collaborating “or partnering” may not protect you as much as you think.

Sometimes the easiest approach is actually the riskiest approach. A strategic partnership exposes one partner to the other partner’s liabilities.

Simply stated:

EACH PARTNER IS JOINTLY AND SEVERALLY LIABLE FOR THE BUSINESS OBLIGATIONS OF THE OTHER.

Corporate attorneys practice separation religiously. Yet the average person is a stranger to the concept in regards to their personal assets. Separation is one of the most important principles in Asset Protection though it is not simple. A mantra I oft repeat is “divide and conquor.” NEVER ever put liability generating assets in the same bucket (entity) as non-liability generating assets (like money or stocks and bonds). Second, NEVER ever put more than one liability generating asset into the same entity with another.

Handshakes (aka joint ventures). What is left in the end is many bankrupt companies and many bankrupt people; financially and emotionally!

If you would like any information pertaining to the security of your partnerships, please call us or email us at TrustMakers. In the meantime, avoid handshake deals like the plague.

Have a healthy and protected week.

Rob Lambert

ABOUT THIS EDITOR:

Rob Lambert, Founder and former law professor is considered to be foremost expert on tax compliant asset protection structures. A contributing editor to Lexus Nexus debtor creditors series of law books Rob's passion is implement client wealth plans that stand the test of time and hold up under duress.

Full Bio - Email Rob