What is a joint venture?

A joint venture refers to an agreement between two or more companies to collaborate on a specific business project or enterprise, pooling their resources and expertise while maintaining their individual identities. This collaboration allows the participating companies to share risks, costs, and profits associated with the venture, which can be particularly advantageous in new markets or complex projects where a single company may lack the necessary resources or expertise.

This arrangement distinguishes itself from a merger, which involves combining two companies into a single entity, or solely focusing on cost reduction strategies. A joint venture typically has a defined lifespan and specific objectives, unlike other forms of partnerships that may involve longer-term commitments or broader agreements. Additionally, the concept of a joint venture does not directly pertain to legal documents for securing patents, since that falls under intellectual property management rather than collaborative business efforts.