Definition
A joint venture is a contractual agreement between two or more parties executing a business undertaking in which the parties agree to share in the profits and losses of the enterprise as well as the capital formation and contribution of operating inputs or costs. It is similar to a partnership, but typically differs in that there is generally no intention of a continuing relationship beyond the original purpose.
“Generally each person contributes assets and share risks. Like a partnership, joint ventures can involve any type of business transaction and the "persons" involved can be individuals, groups of individuals, companies, or corporations.”
“Joint ventures are also widely used by companies to gain entrance into foreign markets.
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The existence of partnerships have been traced back for centuries, however the first resemblance to a joint venture started in England in the 18th century, with the merchant companies for the transport of merchandise and its sales abroad. The first statutory framework was the England's partnership Act of 1890. However international joint ventures have a more prominent appearance in the 1970s and 80s with the creation of many cooperation agreements for financial, technological and commercial ends, for instance the oil industry received vast presence of JVs in the end of the twentieth century. The US created the Revised Uniform Partnership Act of 1994 in U.S. which was later refined in Colorado by Uniform Partnership Act of 1997. These regulated partnerships in general, and therefore certain aspects of JV's. The use of JV's as a tool has been increasingly used in the past decade, as a result of economic globalization, to leverage the odds in benefit of keeping ground in the era of large economic blocs, and have the advantages of being a part of them, such as improved tariffs amongst others.
Role of the Parties
Both parties contribute assets (money, natural resources, technology, intellectual property rights, machinery, etc.) and agree to face possible losses. The parties have a limited responsibility for the debts of the organization and the risk is shared between the parties. In most cases, one of the companies contributed capital and the second technology or resources. The control of the new company is in the hands of the party who had a more valuable contribution.
Partnership – “A legal entity formed by two or more co-owners to operate a business for profit.” (Longenecker, Petty, Palich, Hoy, Pg. 202) In a partnership, the advantage for the owners is the capability to reduce the workload and the financial burden, especially if each partner has management skills that enhances the business. The disadvantages of a partnership such as personal conflicts and leadership expectations, therefore this organizational form should only be chosen once all other options have been considered.
... it is can at times be about co-operation and this is evident in the merger of BHP and Billiton in 2001. What BHP Billiton should have learnt from this analysis is that if they continue to diversify, look for new opportunities in emerging markets and maintain a good public image than maintaining success will not be as difficult as it is to build it up in todays times. It is also important to note as it has been evident in the past that the joint ventures and mergers are becoming increasingly more popular as it opens up many different avenues into conducting business in other parts of the world as well as giving more power and control to MNCs in controlling markets, in an increasingly more globalized world we must put at best foot forward to diversify and integrate business and cultures to remain globally competitive.
in a cooperation whereby a partnership define a business entity as a seller and the other one as a buyer.
The court cited the Universal Partnership Act that defined a partnership as "the association of two or more persons, for the purpose of carrying on as co-owners a business for profit.
A General Partnership is composed of two or more persons (usually not a married couple) who agree to contribute money, labor, and/or skill to a business. Each partner shares the profits, losses and management of the business and each partner is personally and equally liable for debts of the partnership. In terms of asset protection, general partnerships can be even worse than sole proprietorships.
Partnership is generally straightforward and need low costs to be framed it just require an understanding between the parties. All partners evolve in the administration and making the decision as they all have the right to help in any decision. As they are a number of partners that implies they have a much greater source of funds than a sole trader. On the other hand, the Disadvantages of partnership are that it doesn 't have a legitimate identity of its own. The survival issues, as the partnership will be broken up in light of the death of the partner or regardless of the fact that the partner went insolvency. Endless obligations, where the debts in partnership might be taken generally as it could be taken from their own assets to settle the
“A Collaborative Business Structure is designed to bring parties together in a long-term relationship to achieve a common goal. Sometimes this is done through the formation of a new entity, such as a partnership or joint venture that explicitly sets up an opportunity for each of the participants to combine its strengths with those of its partner to their mutual benefit. Clearly, this works best when the strengths of each one match up well with the constraints of the other (Chesterfield Group, 2017)
...uires the partnership to state who all the partners were at the time the cause of action arose. S28(1)(b). It provides that a partnership can be sued in any area where it has business premises or where one of the partners resides
How can firms minimize or manage the bumps, hurdles, or conflicts that often occur when firms join together in an alliance or partnership?
private equity firm with the company it buys and ensures that the company has a lasting success.
...om the imagination that needs to combines those two experts from each areas to make the innovative product become true. Also I've learned that, even these companies are such a big companies worldwide and seems that they don't really conflict between each other but the problem in alliances can happen anywhere in the operation process such like the conflict between their designers team. In order to strengthen the performance of the company in specific task, sometime the company needs to get some help from the other company to fulfill the operation. The alliances has its own life cycle and will not stay long forever. From that reason, the company that consider whether to do the alliance or not might need to be careful and think more about the framework, plan, and financial split before doing any alliances because one day, our partner can become our competitor anytime.
...s of a partnership are the shared profit factor, which can cause a lot of animosity among the partners if things do not go as well or if there is an unequal amount of contribution among the partners. Additionally, there is both individual and joint liability with partnerships. This can often cause dissention between the partners (“SBA”). Essentially, the sole proprietorship is the best choice because the risks are minimal because it is solely one individual, who can make the best choices and decisions and deal with the consequences that arise accordingly.
(i) Collaborative Advantage – This is the positive experience of collaborative alliances, which captures the synergy argument. The term has been defined as the beneficial factor or combination of factors one should achieve from collaboration. Partnership which handles social issues that would otherwise fall apart and help in development is defined as collaborative advantage. To understand the meaning of collaborative advantage we should know the common bases for collaborative advantage. These bases include –
The strategic alliance approached by selling Mazda’s 25% share to Ford motor company. So it was a strategic alliance and shared ownership type. Shared ownership alliance is actually one special form of joint venture.