Joint Venture
A Joint Venture is characterised by several industrial actors coming together to carry out a larger project, such as collaborating on a construction contract.
This type of collaboration is established for a specific project, and often for a limited period of time.
A Joint Venture is characterised by, inter alia, the parties participating on the administration of the collaboration, even in terms of daily operation.
A Joint Venture may be organised as a private limited company, where the participants are shareholders. In addition to obligating participants to establish the public limited company, a shareholder agreement will also regulate their rights and duties as shareholders in the same company.
In other types of Joint Ventures the collaboration is organised as a general partnership or another, more informal, form of collaboration, where individual agreements regulate the rights and duties of the parties involved.
An overall management body where all participants are represented is usually established for a Joint Venture. This is often called a steering committee.
The establishment of a Joint Venture with a foreign partner is often necessary in order to quickly gain access to a new market. Parties go into the venture with approximately the same amount of capital, they share costs and profits equally, and they run the venture together. This type of agreement may be established for a single project only or with a long-term collaboration in mind.
A Joint Venture is different from strategic alliances, in that strategic alliances are not necessary based on equality between the parties involved.