WHAT IS A JOINT VENTURE?
A joint venture, or JV, is a type of business arrangement where two or more parties make an agreement to pool all of their resources to achieve a specific goal. The goal can be a task, a new project, or any form of business activity. All participants in a joint venture are responsible for all the costs, profits, and losses associated with it. The venture itself, however, is completely separate from the party’s other businesses.
While a joint venture is similar to a partnership, it holds no legal standing. Corporations, partnerships, LLCs, and other types of businesses can all form joint ventures. While these arrangements are generally used for research purposes or production, they can also be used for other purposes.
A joint venture can be used to combine both large and small companies to work on bigger projects than they would be able to handle individually.
While joint ventures are similar in nature to a partnership, the primary difference is that a JV is used for one single business activity for only a specified period of time. A partnership is a long-term relationship that is ongoing.
WHAT IS A JOINT VENTURE AGREEMENT?
It is a contract between two parties used to accomplish a specific goal. A joint venture agreement may be the ideal arrangement for your business entity if you need to accomplish a short-term project.
- Your exact goals and objectives;
- Your strategy and tactics for achieving your goals and objectives;
- Who will perform which tasks;
- The communication structure; and
- How (or if) you will share company "infrastructure" such as computers and databases, as well as staff time