| Joint Ventures |
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Joint ventures are the official agreement between two or more companies who agree to work together on a project or venture. They share all the finances, resources risk, and the revenue. It all happens under the control of the mutually collaborating companies. The joint venture is a very common term these days especially in the developing countries. The agreement of joint venture takes place between those companies who both have distinct services to offer each other. It is not necessary that the joint venture is a long term project; it could be short term as well. The two or more companies can decide to do the promotion for each other by under going a joint venture agreement. You might have seen many fast food companies serving a specific brand of ketchup, or you might get gifts from a certain company when you fill up your vehicle tank with fuel. Once the goal is achieved the joint venture ends between the companies. When one talk about joint ventures they should refer to the purpose of that venture, every joint venture has a purpose or goal to achieve. These goals are to be achieved in a limited time which is previously set by the companies. In case any of the two companies has been unable to conform to the conditions of agreement then the party can take help of court to dissolve this venture. A joint venture should always be legally secured so that the rights of all the parties remain safe. While deciding to make joint ventures few of the things should be considered very carefully. First of all you should thoroughly screen out the history of the company that you are interested in venturing with. After that you should under go serious thinking to come up with the workable business plan for all the parties included. Thirdly screen out people who will be the benefiting your business plan because the joint ventures are short term and goal oriented, you will not want to waste your funds on extra staff. Lastly it is very important to make everything official. The information provided by the parties should be checked by the other parties with data and facts, so that there is no hint of half truth or miscommunication is left. Legalize all your documents nothing should be verbal, all agreements should be converted on the legal papers and the copies should be exchanged between all the parties involved. The joint ventures are an easy way to achieve your goal because all the companies have innovation and technical stuff to share. They usually come up with bright ideas and a lot of revenue is gathered by investing the half of total capital by each company involved. They are also important in another way as they can reduce the business expenditure and taxes. They are particularly important for the developing countries mostly the ventures take place between the local and multi national companies from which both the parties get huge benefits. Joint ventures are new concept and it has proved to be useful. |