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Definition of the Viability in Joint Venture
To define “what is a joint venture” practically in general is a partnership typically formed to undertake a particular business transaction, business expansion or project and is intended to exist for a limited or unlimited time period.

Joint ventures typically exist for 10-15 years, it depends upon the terms and conditions during the preliminary partnership negotiation period on the round table.

If both parties are ambitious enough to bring forth the company to be listed at the stock market, then it will consider as “lifetime partnership” functioning until the takeover by the next of generation. (Direct Investment Funds will not have an exist period)

In a joint ventures, two or more "parent" companies or private parties who agree to share capital, technology, human resources, risks and rewards in a formation of a new entity under shared management control.

Joint ventures are created with specific projects in mind and generally dissolves once the project has been completed or it may be a permanent partnership at the parties' discretion with mutual understanding and agreement.

Members of the joint venture are exposed to full legal liability but the risk is still higher for the Private Investor who provide the Direct Investment Funds.

Construing a joint venture, it will be ideal to form the partnership incorporation and registration offshore to reduce high corporate taxes by implementation of an effective, secure and reliable business system.

To form a joint ventures may be for a vast variety of purposes, it is commonly used in real estate partnership, where two or more persons undertake to develop a specific piece of real property commonly referred as short term partnership.

Another aspect for joint ventures are also widely used by companies to gain business entrance into foreign markets with the assistance of their internationally well connected foreign party.

Normally Foreign Companies opt to form joint ventures with domestic companies already present in markets which most Foreign Companies would like to enter to enhance and enlarge the company with their Direct Investment Funds.

The Foreign Companies generally contribute Direct Investment Funds, New Technologies and business practices to the joint venture, while the domestic companies contribute their relationships and requisite governmental documents within the country, along with their established involvement in the domestic industry. Intended joint ventures are usually formed through the legal procedures of creating an offshore registered company, (in our case) sets of document like memorandum of understanding, a joint venture agreement, any ancillary agreements, and obtaining regulatory approval.

Benefits of Joint Venture Partnership as mentioned below :
Providing companies with the opportunity to obtain new capacity, expertise and funds;

Allowing companies to enter into related businesses or new geographic markets or obtain new technological knowledge to enhance production thus increase sale;

They may wish represent a long-term or short term commitment whereas Local Companies can gradually separate a business from the rest of the organization, and ultimately, sell it to the other Parent Company (approximately 80% more or less of all joint ventures which end in a sale by one partner to the other);

Sharing of financial support and financial risks or other unforeseen market setbacks and assist in planning new product development with their global experience.

Pitfalls of a joint venture may happen as mentioned below:
Differences philosophies in governing expectations and objectives of the joint venture partnership;

An imbalance in the level of investment and expertise brought to the joint venture by the two parent organizations;

Inadequate identification, support, and compensation of senior leadership and management team’s liability;

Conflicting corporate cultures and operational styles of the joint venture partnership;

Valued Definitions of Joint Ventures:
Again joint venture is a business enterprise undertaken by two or more persons or organisations to share the expense and hopeful rewards with Return of Profits of a particular business project.

Take note that joint venture is not a business organisation in the sense of a proprietorship, partnership, or corporation but to manage the intended businesses under shared management and devoted responsibilities.

It is an agreement between parties for a particular purpose and usually a defined time frame for short term investment and unlimited time frame for an agreed life partnership with mutual agreed terms and conditions.

Joint ventures may be very informal, such as a handshake and an agreement for two firms to share a booth at a trade show or a few meetings to table out mutual objectives and goals.

Other arrangements may be extremely complex, such as a consortium of major electronics firms joining to develop new microchips where risk could be higher and sharing of equity.

The key factor in a joint venture partnership is its single, definable objective.

Known economic gurus and business research centers agreed that joint ventures have grown in popularity in recent years, despite the relatively high failure rate of such efforts for one reason or another.

Creative small and medium business owners have been able to use this business strategy at a good advantage over the years, although the practice remains one primarily associated with larger corporations.

Most joint ventures are formed for the ultimate purpose of saving money and precious time compare with newly startup businesses.

Business Researchers make surveys from small neighborhood stores that agree to advertise jointly in the weekly paper as it is of international oil companies that agree to work together for purposes of oil and gas exploration or extraction, thus it is the market trend currently.

Joint ventures are attractive because they enable companies to share both risks, costs, shared management, liabilities and overall responsibilities.

Legal Aspects and Joint Venture Structures
Joint ventures are governed entirely by the mutually agreed legal agreements that brought them into existence with due respect of the partnership.

Most joint venture partners may wish to formulate the venture by creating a new joint venture company instead of acquisition or purchase the shares of the current Local Company.

Joint venture companies can be very flexible entities in which each party can request for an allotment for shares and agree on how they will be managed.

More common are joint venture agreements that do not include the formation of a new entity.

Instead, the venture is operated through the existing legal status of the venture partners, or co-venturers.

Since the joint venture is not a legal entity, it does not enter into contracts, hire employees, or have its own tax liabilities.

These activities and obligations are handled through the co-venturers directly and are governed by contract law.

Corporate law, partnership law, and the law of sole proprietorship do not govern joint ventures.

Finally, since the venture ends at the conclusion of a specific project, there is no need to address issues of continuity of life and free transferability, unless a joint venture company has been created for permanent status or being listed at the stock market.

Reasons Why Joint Ventures Failed
Many business consultants or business brokers provide counsel to clients in approaching joint ventures cautiously.

They acknowledge that such partnerships can be most valuable in nourishing a company's growth and stability, but also point out that small and medium businesses usually have far less margin for error than do multinational corporations, or even mid-sized companies.

Consulting experts recommend that Private Investors should consider a joint venture with another establishment (or establishments) to launch a small joint venture first and subsequently increase funding, once, all relevant matters are in place.

Such small projects allow Private Investors to test the relationship without committing large amounts of money.

This is especially true when companies with different structures, corporate cultures, and strategic plans work together as these sorts of differences often make it difficult to work together smoothly.

So, going through a period of "courtship" before committing to the marriage is usually a wise move for Private Investors.

In addition to a period of courtship, Private Investors will investigate the prospective partner thoroughly including interviews with prior joint venture partners, suppliers, and customers.

This is especially true for a small and medium company considering a joint venture agreement with a company with solid funding, informative knowledge of the global market and providing newer technology.

Soundly to mention, joint ventures can benefit all parties to the agreement greatly, and often perform accordingly in due respect of the signed agreements.

But when they go wrong, the pattern is often a familiar one, explains Gabriel Berg, a partner in the New York City Law firm of Berg & Androphy, a firm that handles many claims of idea theft.

Ms. Berg is quoted in an Entrepreneur Article that highlights difficulties that often arise when a small and medium company wishing to market or advance a new product idea enters or attempts to enter a joint venture agreement with a Private Investor.

Berg outlines the pattern she has seen in countless lawsuits arising from failed joint ventures this way.

Early on, the small and medium company will try to protect itself through the use of nondisclosure agreements and by withholding key information, which denied the Private Investor to further probe the stability of its current business situation.

Over time it may feel pressure to share proprietary information too early in the process because it needs the Private Investor's resources—capital or market distribution network.

By divulging this information too early and before contracts exist to strictly define the terms under which the parties will develop the joint venture project, the small and medium company puts itself in a vulnerable position.

"It's easy to think nondisclosure agreements are enough, but most leave room for either party to claim that nothing new has been invented … (and) both sides have room to come back later and say, 'Oh, we always knew how to do that.”

Business Gurus often stress that people sitting down to discuss a joint venture partnership are usually in an optimistic mood and want to trust their potential partners, actually it is healthy initially to do so. (Without trust there shall be no discussion or meeting to proceed further for negotiation.)

It is advisable that either party should make its move “like playing chess, action convert into decision”.

However, if the optimism causes the partners to proceed before their relationship is thoroughly documented in the form of contracts, it show confidence and trust.

Although it is crucial that contracts and agreements exist should clearly define how the costs and benefits of the joint venture will be shared by each partner but by displaying of common trust can improve relationship.

On the other hand, small and medium business owner may wake up to the surprising scenario described by Berg this way, "the private Investor call up stating its acceptance to invest its funds, and ready to march forward with your ideas”.

So as the saying goes “without trust between partners, no venture can proceed as stagnant water”.

Managing a joint venture partnership is another area that often causes friction in the partnership but in trust, we can stand united to climb the ladder of success together.

Managers of one part of the joint venture may be more adept and/or decisive with their decision making than their counterparts at the other company but such differences can be settle through brainstorming sessions.

Brainstorming can help to eradicate tension and a lack of cooperation.

Projects are opt to be easily co-operated if the company executives or representatives of the Private Investors take the initiative to brainstorm all decisions and trouble shoot the agenda.

Furthermore, a well-defined brain storming session that is predicated on mutually recognized goals and strategies shall progress at ease.

After the brain storming session in winning a joint venture, it will be wise to start the transformation immediately in order to boost up the confidence of your new partnership.

Remember a good alliance is like a marriage, it is built on communication, trust and mutual understanding.

To accomplish your vision and dream goals, joint venture is the best option and strategic alliances can be a positive outcome for all parties involved.

Time is precious!

Opportunities come and goes off like ashes.

Prepare yourself by understanding the process through communication and information provided by your future partner.

Make the right decision to bring forth your business to be well positioned into the future.

If you cannot beat the Goliath of your industry, join us.

Two heads are better than one, we need to stand united as a force to keep the Goliath at bay.

Famous Quote:
"Of course there is no formula for success except perhaps, an unconditional acceptance of life and what it brings". Artur Rubinstein

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