Are there any restrictions on the types of investments a joint venture can make?

In Texas, there are certain restrictions that exist when it comes to the types of investments a joint venture can make. According to the Texas Business Organizations Code, the investments a joint venture is restricted from making are as follows: investments in real estate, investments in securities other than those issued by other entities in the same joint venture, and investments in any company, partnership, trust, or other organization that is not controlled by the joint venture. In addition, a joint venture cannot invest funds in any state or federal law that would be in conflict with the joint venture agreement or any other law applicable to the joint venture. Moreover, the joint venture cannot directly or indirectly use its assets in any manner that would be contrary to any law that applies to the joint venture. Finally, investments in any asset or instrument that would be deemed “unsafe” by the joint venture agreement or any law applicable to the joint venture is prohibited. An unsafe asset or instrument would be any asset or instrument that may expose the joint venture to an unreasonable risk of loss. In short, joint ventures in Texas are restricted from making certain types of investments. These restrictions are important to protect the interests of the joint venture and to ensure the joint venture is carried out in accordance with the applicable laws in Texas.

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Are there any restrictions on the types of investments a joint venture can make?

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