![]() ![]() In the United States, their use began with the railroads in the late 1800s. Joint ventures have existed for centuries. A joint venture can terminate at a time specified in the contract, upon the accomplishment of its purpose, upon the death of an active member, or if a court decides that serious disagreements between the members make its continuation impractical. A fiduciary responsibility is a duty to act for someone else's benefit while subordinating one's personal interests to those of the other person. Each joint venturer has a fiduciary responsibility, owes a standard of care to the other members, and has the duty to act in Good Faith in matters that concern the common interest or the enterprise. The parties have a mutual right to control the enterprise, a right to share in the profits, and a duty to share in any losses incurred. All joint ventures also involve certain rights and duties. ![]() The contract is crucial for avoiding trouble later the parties must be specific about the intent of their joint venture as well as aware of its limitations. In a collaboration, for example, a high-technology firm may contract with a manufacturer to bring its idea for a product to market the former provides the know-how, the latter the means.Īll joint ventures are initiated by the parties' entering a contract or an agreement that specifies their mutual responsibilities and goals. ![]() Joint ventures can be distinct business units (a new business entity may be created for the joint venture) or collaborations between businesses. Individuals or companies choose to enter joint ventures in order to share strengths, minimize risks, and increase competitive advantages in the marketplace. It is similar to a business partnership, with one key difference: a partnership generally involves an ongoing, long-term business relationship, whereas a joint venture is based on a single business transaction. An association of two or more individuals or companies engaged in a solitary business enterprise for profit without actual partnership or incorporation also called a joint adventure.Ī joint venture is a contractual business undertaking between two or more parties. ![]()
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