Joint Venture

The term “joint venture” is not a legal term of art and it encompasses a wide range of transactions.

Generally, a joint venture arises when two or more companies or firms agree to establish a common enterprise or business-related activity in which they intend to participate jointly.

Joint ventures are an important strategic option for many businesses, particularly those operating internationally. Reasons for setting up a joint venture vary but some of the common rationales are:

  • cost savings
  • risk sharing
  • access to technology
  • expansion of customer base
  • entry into emerging economies
  • competition

There are downsides to joint ventures and many fail due to inherent problems in the form of the co-operation they require. Some of these problems are:

  • Sharing management
  • differences in culture
  • usurping of skills, technology, etc.
  • different commercial objectives
  • management control
  • disagreements
  • management time
  • lengthy costs and negotiations
  • exit

You can learn a lot more about joint ventures by reading the more detailed ‘Joint Ventures Advice’ PDF

quote marksEversheds Sutherland has been hugely helpful in supporting us as we have grown as an organisation, and have understood what is needed to deliver legal advice in a practical manner that fits with our business at the time.quote marks

Ben Jackson, Oxygen Finance CEO

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