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What is a joint venture and how is it different then other ventures?

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posted Aug 15, 2015 by Salil Agrawal

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A Joint Venture (JV) is a cooperative enterprises entered into by two or more business entities for the purpose of a specific project or other business activity.

Often the joint venture creates a separate business entity, to which the owners contribute assets, have equity, and agree on how this entity may be managed. The new entity may be a corporation, limited liability company, or partnership.

In other cases, the individual entities retain their individuality and they operate under a joint venture agreement. In any case, the parties in the JV share in the management, profits, and losses, according to a joint venture agreement (contract).

Joint ventures are often entered into for a single purpose - a production or research activity. But they may also be formed for a continuing purpose.

Some popular example of Joint Venture business is:

1: Sony Ericsson is a joint venture to make mobile phones where Sony is a Japanese electronics company, and Ericsson is a
Swedish telecommunication company.

2: Caradigm, a joint venture between Microsoft Corporation and General Electric Healthcare.

3: Hero Honda, a joint venture between Hero Cycles India and Honda Motor Company Japan to manufacture two-wheeler vehicles.

answer Jul 23 by Ajay Kumar
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