Joint Venture Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Joint Venture, written in plain English, along with examples of how it is used.
What is Joint Venture?
They are similar to a partnership where two or more persons or entities unite and agree for a specific purpose of business for the motive of profit. But unlike partnership, once that specific purpose if over and bills settled, such agreement cease to exist. Till the time the purpose is solved, each party binds the other legally and each one have rights in day to day management.
History and Meaning of Joint Venture
A Joint Venture (JV) is a business arrangement between two or more individuals or companies who pool their resources and expertise to achieve a specific goal. JVs started emerging in the late 19th and early 20th century with the growth of conglomerates and multinational corporations. JVs can be used for any business proposition, including R&D projects, real estate investments, and marketing strategies. The main purpose of a JV is to achieve a shared goal or objective on a temporary basis.
Examples of Joint Venture
- In the entertainment industry, a movie studio and a production company may form a JV to co-finance and co-produce a film.
- In the technology sector, a hardware manufacturer and a software developer may form a JV to create a new product that combines their respective technologies.
- In the real estate market, two developers may form a JV to build and manage a large commercial property.
Legal Terms Similar to Joint Venture
- Partnership: A partnership is a business entity in which two or more parties, including individuals, businesses, interest-based organizations, or some combination of these, join together to conduct business activities.
- Merger: A merger refers to the joining of two or more companies, which results in a new entity with a new ownership and management structure.
- Acquisition: An acquisition is the purchase of one company by another, through either a stock purchase or an asset acquisition.
- Strategic Alliance: A strategic alliance is an agreement between two or more parties to pursue a set of agreed-upon objectives needed while remaining independent organizations.