What Is a Joint Venture?
A joint venture occurs when two or more parties enter into a business arrangement for the purpose of achieving a specific goal. During the venture, each party equally shares the profits, losses, and risks associated with the arrangement. However, the venture is a standalone entity, separate from each party and their business interests.
Although they do not have to be partnerships, depending on the structure, some partnership laws may apply to joint venture agreements, such as laws and regulations dealing with income tax.
Joint ventures are usually limited in time and scope and are often used by businesses to enter foreign or non-local markets. For instance, a business looking to enter a market in a different state or country can do so by entering into a joint venture with a business already in that country — rather than physically moving part of the business there.
Types of Joint Venture Services We Can Assist With
Successfully entering into and working in a joint venture requires companies to address various levels of business dealings, all of which benefit from attention from attorneys.
Our Successful Cases
What Are the Rights of Joint Venturers?
Joint ventures are attractive because of the rights afforded to each participant, which may include:
- Equal ownership over the business or business project of the venture — this includes equal influence and decision-making powers unless parties agree to assign one party more control or influence.
- The right to end participation in the joint venture under predetermined circumstances.
- A right to share in profits equally or in a manner determined by agreement through a contract.
A participant in a joint venture also has the right to continue operating as a separate entity throughout the life of the joint venture, as well as after the joint venture has ended.
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