A joint venture is an official agreement between two or more businesses or parties, in which each agrees to collaborate with the other, pooling resources in pursuit of a shared goal. It can be formed for any type of business activity or project.
What Is a Joint Venture?
A joint venture is an official agreement between two or more bu-
sinesses or parties, in which each agrees to collaborate with the
other, pooling resources in pursuit of a shared goal. It can be for-
med for any type of business activity or project.
A joint venture is a separate
entity from the businesses
or parties participating in it,
but each participant main-
tains equal responsibility
for all of the associated
costs, profits and losses.
There are a variety of legal structures that
can define a joint venture. While they are
a partnership, there can be more than two
parties involved. Corporations, limited liabi-
lity companies, partnerships and many other
forms of entities can enter into a joint venture.
The primary purpose of a joint venture is
usually production of a particular asset or re-
search into a specific subject. However, joint
ventures can also be formed for more lasting
purposes, or to perform several individual
projects or deals of any size.
A contract defines all of the terms of a joint
venture, laying out objectives, contributions,
strategies, operations and profit and loss
rights and responsibilities.
A strategic partnership can be a less formal
arrangement than a joint venture.
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