joint venture

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Joint venture

An agreement between two or more firms to undertake the same business strategy and plan of action. See: Incorporated joint venture and Unicorporated joint venture.

Joint Venture

A project or other business activity in which two persons or companies partner together to conduct the project. In a joint venture, each of the persons or companies in the joint venture is responsible for profits, losses, and operations. A joint venture operates like a partnership and is usually taxed like one. A key difference between a joint venture and a partnership is the fact that a joint venture, when it involves companies, does not necessitate the merging of all the companies' operations and interests; rather, they cooperate for purposes of the joint venture only.

joint venture

A business undertaken by two or more individuals or companies in an effort to share risk and use differences in expertise. For example, oil companies often enter into joint ventures on particularly expensive projects carrying a high risk of failure. See also consortium.

joint venture

a business owned jointly by two (or more, in some cases) independent firms who continue to function separately in all other respects but pool together their resources in a particular line of activity. Firms set up joint ventures for a variety of reasons. The combining together of the resources of the two firms may facilitate the establishment of a larger-scale operation giving the joint venture access to economies of scale and increasing its penetration of the market. A joint venture is often a particularly effective way of exploiting complementary resources and skills, with one firm, for example, contributing new technology and products and the other providing marketing expertise and distribution channels. In the international context, joint ventures with local partners are often used by MULTINATIONAL ENTERPRISES as a means of entering unfamiliar foreign markets (see FOREIGN MARKET SERVICING STRATEGY).

Joint ventures are usually a less expensive way of expanding a firm's business interests than undertaking full mergers and takeovers (see EXTERNAL GROWTH); and they also allow firms to withdraw from a particular activity more easily (see DIVESTMENT). The main problem with joint ventures centres on the need to secure agreement between the two partners (especially if it is a 50 – 50 arrangement) as to how the business should be managed and developed. See BUSINESS STRATEGY, STRATEGIC ALLIANCE.

joint venture

a form of STRATEGIC ALLIANCE in which a business is owned jointly by two or more independent firms that continue to function separately in all other respects but pool their resources in a particular line of activity. Firms set up joint ventures for a variety of reasons. The combining of the resources of the two firms may facilitate the establishment of a larger-scale operation, giving the joint venture access to ECONOMIES OF SCALE and increasing its penetration of the market. A joint venture is often a particularly effective way of exploiting complementary resources and skills, with one firm, for example, contributing new technology and products and the other providing marketing expertise and distribution channels. In the international context, joint ventures with local partners are often used by MULTINATIONAL COMPANIES as a means of entering unfamiliar foreign markets.

Joint ventures are usually a less expensive way of expanding a firm's business interests than undertaking full mergers and takeovers (see EXTERNAL GROWTH). The main problem with joint ventures centres on the need to secure agreement between the two partners (especially if it is a 50–50 arrangement) as to how the business should be managed and developed.

joint venture

A legal entity somewhat similar to a partnership,except that its purpose is the pursuit of a single transaction for the mutual benefit of both joint venturers. Each joint venturer has equal rights of direction and control. For tax purposes, the joint venture is treated as a partnership and must file a partnership tax return.

Joint Venture

An enterprise participated in by associates acting together, with a community of interests, each associate having the right to participate in its management. For income tax purposes, a joint venture is treated as a partnership, not taxable in its own capacity, but regarded as a taxpayer for the purpose of computing its taxable income, which is distributable among the associates in the proportions agreed upon. Such distributive shares are reported by the associates on their individual income tax returns.
References in periodicals archive ?
Companies A and B each contribute property with an estimated fair value of $5,000 for 50% interests in a corporate joint venture.
Finally, the editors identify turbulence in Third-World environments as a major problem for any form of management and recommend strategies to help buffer the organization-- specifically, linking up with other indigenous firms and governments, and participating in international corporate joint ventures.
Since "check the box" regulations cleared the way, LLCs have become popular vehicles for various types of corporate joint ventures.
And deferred taxes will have to be provided on unremitted earnings of domestic corporate joint ventures recognized after the effective date of the statement.
As corporate joint ventures proliferate for compelling reasons -- such as allowing companies to share technology, reduce high capital costs, and limit risk exposures -- the LLC continues to be the joint venture vehicle of choice.
Tax Planning for Corporate Joint Ventures, Partnerships and Other Strategic Alliances (3 vols.
With almost 30 years of experience in tax law, his practice includes advising on the tax aspects of fund formation and transactions, cross-border and domestic mergers and acquisitions, initial public offerings, international corporate joint ventures, corporate reorganizations and group restructurings, employee share incentives and general corporate, commercial and employment related matters.
Pickett has held positions on the Boards of Directors of several regional and international corporate joint ventures and philanthropic organizations.

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