JOINT VENTURE

A JV is a very lucrative arrangement as it offers an enormous amount of benefits by which the parties to the JV could gain. The JV could be a beneficial arrangement in the following ways:

• Leveraging of strength & resources available with both the parties;
• Creating a platform to attain the business goals which are otherwise difficult or uneconomical to achieve independently;
• Access to newer markets or segments;
• Strengthen position in the existing markets;
• Diversify into new businesses;
• Gives competitive advantages;
• Shares the risk or initial losses associated with a new business;
• Allows the business to expand with a smaller amount of capital.

A JV can be structed in the following ways:-

1. Company

2. Partnership Firm

3. LLP

4. Strategic Alliance

No. This is not mandatory.

The parties to the J.V can contribute in the form of monetary capital, Plant & Machinery, technology, customers, know-how and experience, etc.