JOINT VENTURES – When And How To Use This Corporate Framework

Synopsis

A joint venture (JV) is a legal framework in which two business parties contribute content and joint business activity. The joint venture can be established as a partnership (regular or limited) or a limited liability company, and the type of structure depends on the various circumstances and considerations of each venture.

The main characteristic of joint ventures is that the two partners hold equal ownership and/or control in the JV (or close to it), equality that affects the way the joint venture is built and the way its business is managed, as shall be further elaborated in this article.

Background – Economics of comparative/complementary advantages

Often, two parties wish to collaborate in the building of a joint activity. The background of joint ventures is diverse and is rooted in the relative advantages that each of the two partners brings to the transaction: whether it is a relative advantage in financial capital, human capital,