![]() Joint ventures usually have a defined timeframe or outcome, such as a one-off project – although they can also encompass long-term partnerships. Joint ventures don’t need to be equally split between partners, either, with different partners able to hold differing stakes. Joint ventures aren’t restricted to limited companies opens in new window, either.Īny number of companies or individuals may collaborate on a joint venture, and these agreements can involve all types of business structures including sole traders opens in new window and self-employed individuals opens in new window, limited companies and limited partnerships. ![]() It’s effectively a commercial agreement between two or more participants, usually entered into in order to achieve specific business goals such as launching a new type of business or selling products into a new market.Įach company maintains their separate business structure and legal status opens in new window, with joint ventures sometimes creating a new, jointly-owned child entity that is effectively at arms reach from the parent companies. Our Making business finance work for you guide is designed to help you make an informed choice about accessing the right type of finance for you and your business.Īt its most basic, a joint venture is when two or more businesses agree to work together. We know that understanding the many different types of financial product in the marketplace can be difficult. Starting a business doesn’t come with a set of instructions. It pays to understand what joint ventures are, as well as their advantages and disadvantages. However, they aren’t without their pitfalls and poorly conceived partnerships can harm both parties. Joint ventures can dramatically increase the reach and scale of both businesses while reducing the risk. Joint ventures are usually formed by two businesses with complementary strengths.įor example, a technology company may create a partnership opens in new window with a marketing company opens in new window to bring an innovative product to market.Īn overseas business could join forces with a local distribution company in order to sell its products in that local market opens in new window. ![]() Today’s business often collaborate with other companies on joint ventures – pooling their resources and expertise to develop new products, expand into different markets opens in new window or increase operational capabilities.Ī joint venture allows businesses to grow and gain access to markets or expertise beyond their existing capability.īy teaming up with another company, many small businesses use joint venture agreements to share specialised expertise, such as technical skills or intellectual property opens in new window, as well as spread the risks and costs of developing a new market or product.
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