Joint translates from English to Spanish as “conjunto” and Venture as “empresa”, both form the expression “Joint company” in Spanish.
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This expression refers to a type of collaboration agreement between two or more companies for achieving the same objective.
Characteristics of Joint Venture
The main characteristics are the following:
- Companies maintain their independence and identity, so no type of merger or absorption will occur.
- The contributions that contractors must fulfill can consist of money, goods, technology, services, strategies, etc.
- There are no requirements on how to act jointly, so companies can associate through signing a collaboration contract, constituting a UTE or even creating a company in which both parties are partners.
- These unions fulfill a common purpose.
- They have a signed contract between the parties where the bases of the association, purposes… are specified.
Advantages of Joint Venture
The main advantages of Joint Venture:
- It allows entry to new markets and new activities. Companies that collaborate do not stop performing their original activity, but create new joint activities or enter new markets.
- It allows diversifying risks, since when starting a new activity or accessing a new market, if done alone the risk is much higher.
- Responsibility is shared, since if any of the operations or the common project itself does not turn out as it should, responsibility would be distributed among the associated companies.
- All types of resources are shared, human, technological, financial, real estate…
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