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What is a Joint Venture Agreement?

Reading time: 10 minutes

Quiz time: 3 minutes

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It is a written agreement where two or more parties or corporations team up in collaboration towards a specified objective, aimed at their combined interest. A Joint Ventures (JV) means joining two or more parties to share resources, knowledge, and funds for establishing a new legal entity/partnership which is created to operate a specific project or businesses together by the joining parties. The joint venture will operate under this agreement that lays down the terms, duties, stipulations and the management structure for the parties.

Such alliances may arise when firms with complementary capabilities, looking into joint projects or seeking entry into an international arena want to join forces. These are common in different sectors such as real estate, technology, power and manufacturing. All partners stand to benefit from a successful joint venture as it enables such growth prospects, risk sharing, and new market opportunities. Nonetheless, it involves strategic planning, negotiations to reach agreement on the terms, and legal documentation that safeguards both parties.

We give you information about common and unusefull clauses in Joint Venture  Agreements . We take a dive into what could go wrong with Joint Venture Agreements. And there's a quiz!