A joint venture is a business arrangement in which two or more parties collaborate on a specific project or limited business purpose.
Why a joint venture matters
A joint venture matters because it can create shared control, shared profits, shared losses, and legal duties between parties. The arrangement may be contractual, entity-based, or a mix of both.
The details affect liability, decision-making, intellectual property, financing, exit rights, and fiduciary duties.
Where a joint venture appears
Joint ventures appear in real-estate development, technology projects, manufacturing, distribution, research collaborations, infrastructure projects, and business expansion deals.
Practical example
Two companies agree to develop and sell a product together, with one providing technology and the other providing distribution. Their joint venture agreement may define ownership, revenue sharing, and control.
How a joint venture differs from nearby terms
A joint venture differs from a general partnership because it is often limited to a specific project or purpose. It differs from a merger because the parties usually remain separate rather than combining into one company.
Related terms
Quick knowledge check
Why should a joint venture agreement define control and exit rights clearly?