Joint Venture

A Joint Venture is when there is a pooling of resources from two separate legal entities, into another legal entity. The two founding entities will likely provide resources, financial and human resources.

In order to develop a new business, it is sometimes best to set up a new and separate legal entity. A Joint Venture or JV is when two or more, independent legal entities which could be either Companies or Individuals, join forces to develop a separate business entity that can legally act in its own name. A JV, it is a pooling of resources. The participants could partner in developing the new business venture for numerous different reasons. The motive could be that one of the JV participants has the product or technology background. While the other(s) partners could have the access to a new market for this product or technology. Or a new project could be so large that companies would need to pool their resources. Then again, it could be simply to divide the risks in developing a new product or service.