What is a joint venture?

A joint venture refers to a collaborative agreement between two or more companies to work together on a specific project or business activity. This partnership allows the involved parties to combine their resources, expertise, and capital to achieve a shared objective while maintaining their separate legal identities. One of the defining characteristics of a joint venture is that it is typically organized for a limited duration or purpose, distinguishing it from more permanent arrangements like partnerships. In this context, companies may share profits, expenses, risks, and control over the operation of the project they are jointly undertaking. This type of collaboration is common in various industries, particularly when companies seek to enter new markets, develop new products, or share technological advancements without the commitment of a full merger.