A joint venture involves two or more businesses pooling their resources and expertise to achieve a particular goal. The risks and rewards of the enterprise are also shared.

What are joint ventures when are they formed?

A joint venture (JV) is a tactical partnership where two or more people or companies agree to put in goods, services and/or capital to a uniform commercial project. For any successful joint venture in India, compatibility between the contracting parties is key.

Can two partnership firms form joint venture?

It can be in the form of partnership firm , corporation or any other business entity which the parties may choose. A Joint Venture can be formed for any lawful business purpose. Any Joint Venture requires a partner, so there has to be two or more partners for forming a Joint Venture.

Which is better joint venture or partnership?

A partnership involves an agreement between two or more parties wherein they agree to share the profits as well as any loss incurred in a single venture. Although a joint venture is very similar to a partnership, a joint venture is generally more limited in scope and duration.

Can 2 companies be partners?

Two or more individuals or companies may carry on a business as a partnership. A partnership is not a separate legal entity and, as such, the assets of the partnership are owned by the partners jointly or in such proportions as set out in the partnership agreement.

Is a joint venture a legal entity?

Joint venture companies can be very flexible entities in which partners each own shares and agree on how they will be managed. Since the joint venture is not a legal entity, it does not enter into contracts, hire employees, or have its own tax liabilities.

Is joint venture a separate legal entity?

Yes, a ‘joint venture’ is recognised as a distinct legal concept in India. As per the provisions of the Companies Act 2013, a joint venture is defined as a joint arrangement, whereby the parties that have joint control of the arrangement have the rights to its net assets.

Does a joint venture have to be a legal entity?

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.