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refer to business projects undertaken cooperatively by two or more parties where each contributes different skills and resources and shares in the results of the endeavor. Unlike a financing where one party’s contribution is limited to money, joint ventures usually include active participation by all joint venturers. For example, one party might contribute technology and product development expertise while the other manages product manufacturing and marketing and provides the financing to get the product to market. Joint ventures can be structured as contractual arrangements or can appear as specialized partnerships. They can even appear as corporations with special contractual arrangements among the shareholders. Extensive negotiation to determine the precise roles of each joint venturer is commonplace. More often than not a joint venture succeeds because the contributions of each party compliment one another and because the relationship of the joint venturers has been thoroughly considered and documented. See: Licensing, Off Balance Sheet Financing. |
