joint venture


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Related to joint venture: Strategic alliance

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 ?
As applied to the joint venture context, resource-based theory indicates that a joint venture may allow the participating firms to bring together some of their resources in order to reap various benefits that would I be difficult to obtain otherwise.
A 1975 study of cooperatives involved in food marketing and processing identified 22 joint ventures, as compared to almost 100 federated cooperatives in operation at that time.
The joint venture agreement is subject to governmental approval in Chengdu, China.
* The joint venture operations in New York, New Jersey and California, including the scrap processing facilities, marine terminals and related ancillary satellite sites, the interim New York City Recycling Contract and other miscellaneous assets; and
Careful consideration of these issues and thoughtful drafting can overcome the difficulties, but the increased time and effort involved is one reason why the transaction costs of a joint venture and the time it takes to put together a successful one can greatly exceed those required for an outright acquisition.
P&G will pay Clorox $133 million to increase its share of the joint venture from 10% to 20%.
Bosch is also active in steering systems through ZF Lenksysteme, its joint venture with ZF.
Dentsu denied these reports as 'hearsay,' just as they earlier dismissed advance reports about the new joint venture. Asatsu-DK did not respond to questions.
The Finnish trading house Kesko Corporation said on Tuesday (8 June) that its subsidiary Kesko Food Ltd had signed an agreement with the Swedish company ICA Baltic AB, part of the Swedish grocery chain ICA AB Group, to establish a joint venture for the Baltic food market.
* Our evidence from the analysis of performance data on 27,974 foreign subsidiaries challenges conventional notions about joint venture survival rates and financial performance.
Equinix announced the signing on of a greater than $1B initial joint venture in the form of a limited liability partnership with GIC, Singapore's sovereign wealth fund, to develop and operate xScale data centers in Europe.
has an agreement to form a $3.8 million joint venture with the Canada Pension Plan Investment Board.

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