Shared venture definition free#

For this purpose, it can invest with the supplier to develop and maintain the capacity of such production and avoid the uncertainty arising due to unavailability of this input material. This is done when one of the entities produces a particular kind of good for which it needs a raw material of specialized nature. Vertical Joint VentureĪs in the vertical M&A, the Joint venture is between two business entities in the same supply chain. For example, if a company has owned fleet of transport while another has extra storage space, both can help each other out in inventory management and save each other’s costs of having individual fleets or storage spaces and use them in their idle time. This is a format in which both the companies come together because each has expertise in one or the other business functions and therefore they wish to create a symbiotic environment for each other and benefit from the synergies so developed.

Recently, in Feb 2020, Trilogy metal and South 32 completed a joint venture in Vancouver, and formed the company Ambler metals LLC, with the purpose of advancement of Arctic & Bornite projects & exploration of the Ambler mining district. Once the project is completed, the Joint Venture comes to an end. Key characteristic is that the purpose is defined and limited to the completion of the single project as per the agreement of the venture. It could be created for purposes like creating a toll road or an office complex and so on. This is the most common form of joint venture.

Joint venture is a separate legal entity and therefore enjoys all the benefits of a company such as acquiring assets in its own name, limited liability and so on.

At times the government also enters into joint ventures with corporate entities for their skill and expertise.

However, there can be a totally new company created for a new business project to be undertaken by the coventurers.

A foreign company comes into a new market by acquiring an interest in a local company or the opposite is also true when the local company wishes to expand its business into new avenues, it can buy some interest into the already present foreign entity.

Joint venture can come into existence through any of the following ways:.The books of accounts of a Joint Venture can be maintained separately if it is a long run Joint Venture while they can also be merged with those of the co-venturers in case it is a short run Joint Venture or the value of the transactions is not too significant.

The members of the Joint Venture are sometimes called the co-venturers.An example of the same could be the DSP BlackRock Joint Venture that was set up for a period of 10 years after which the Joint Venture was split. Joint venture may not have a specific name, basically, most ventures are for a limited period, and therefore giving a name to the same might not be a good idea.In the case of a time-bound arrangement, the venture comes to an end when the project underlying the same comes to an end.

It can be limited to one specific project and therefore time-bound, or can be an arrangement of conducting a specific kind of business as a going concern and therefore not time-bound.

The purpose of the joint venture is defined.

Shared venture definition free#

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