What happens to joint venture assets when a joint venture is dissolved?

When a joint venture is dissolved in California, assets held in the joint venture must be divided among the members according to the terms of the joint venture agreement. In some cases, the joint venture agreement may dictate that the assets are to be divided among the members in certain proportions or directions. If there is no agreement or the agreement is silent on the question, then assets are to be divided in accordance with California law. Under California law, the assets of the joint venture are to be divided in proportion to the contributions of each of the joint venturers. The contributions of each joint venturer are assessed by the fair market value of property they have contributed to the joint venture and the services they have performed for the joint venture. In addition, California law requires that all creditors of the joint venture must be paid in full before any assets of the joint venture can be distributed to the joint venturers. If there is not enough money to pay all of the creditors, then the money must be divided among the creditors in proportion to their claims. Finally, any remaining assets of the joint venture must be divided among the joint venturers in proportion to their respective contributions to the joint venture. However, any profits made from the joint venture must be split in the same ratio as the joint venturers’ contributions.

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What happens to joint venture assets when a joint venture is dissolved?

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