What is a Joint Venture?

A joint venture is a common way of combining the resources and expertise of two (or more) otherwise unrelated companies.

It is an arrangement, namely a Joint Venture Agreement, between two or more participants who agree to join together to achieve a particular business objective.

Joint ventures cover eclectic business arrangements and are generally characterised by shared ownership, shared returns and risks, and shared governance.

Joint ventures may be for a fixed or indefinite period of time.

Why do a Joint Venture?

One of the most important joint venture advantages is that it can help your business grow faster, by increasing productivity, innovation and (ideally) generating greater profits. Other benefits of joint ventures include:

• access to new markets and distribution networks;
• sharing of liability with a partner;
• access to greater resources from partner company; and
• joining of forces in marketing, research and development

Joint ventures often enable growth without having to borrow funds or look for outside investors.

Is a Joint Venture right for my business?

A joint venture has many advantages, as well as some risks. You need to ensure that entering into a joint venture fits your overall business strategy. In reviewing your business strategy, you are able to understand exactly what your business needs, and any areas you are able to improve on.

For example, smaller businesses often want to access a larger partner's resources, such as a strong distribution network, specialist employees and financial resources. The larger business might benefit from working with a more flexible, innovative partner, or simply from access to new products or intellectual property.

If you or your business require information regarding anything in this blog or generally about your business or any other corporate matter, please call Sarah Ward, one of our Corporate partners, on 07889 589596 or e-mail Sarah at sward@georgegreen.co.uk for advice and assistance.