A Joint Venture is a General Partnership typically formed to undertake a particular business transaction or project rather than one intended to continue indefinitely. Most often, joint ventures are used in real estate matters where 2 or more persons undertake to develop a specific piece of real property.
¨ç Risks of an undertaking are divided among the partners.
¨è Financial or other resources can be combined to undertake projects which could not be undertaken alone.
¨é Greater managerial control than is available pursuant to contractual undertakings.
¨ê The exchange of necessary information is fostered by the joint venture relationships due to the clearly common interest in commercial success.
¨ë Due to investment laws and cultural preferences, joint ventures may often be the preferred or the only way of doing business in many foreign countries.
¨ì Valuation uncertainty can be easily handled.
¨í Fair dealing between partners can be mechanically encouraged.
¨î Joint ventures permit desired integration where merger would be impractical or legally impossible due to size and diversity of the parties.
¨ï Economies of scale can be achieved.