Question

Write a short note on joint venture.

Answer 1

(1) Two or more individuals or enterprises, either private or government, owned or a foreign company joining together through participation in equity capital for achieving a common target and mutual benefit is known as joint venture.

(2) Joint venture involves pooling of resources and expertise as well as sharing of risks and rewards by these enterprises.

(3) These enterprises agree to join together for the expansion of business, development of new products or for penetrating into new foreign markets.

(4) Joint ventures are formed either for long-term projects or for short-term projects.

(5) The basic purpose of joint ventures is to attain a strong position for both the enterprises.