Common Characteristics Of A Joint Venture

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A joint venture (JV) can be mean by, an enterprise, co-operation or partnership that formed by two or more companies, individuals or organizations. However, there must be at least one of the parties working as an operating entity that wishes to broaden its activities for the purpose of conducting a new, profit motivated business of permanent duration. In general, the ownership, profit and risk are shared by every parties or participants in joint venture with more or less equal equity distribution and without absolute dominance by one party.
An “operating joint venture” is a partnership through which two or more firms create a separate entity to carry out a productive economic activity in which each partner take part in decision making. Each party of the operating joint venture makes a substantial contribution in the form of
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While a partnership concerns ongoing business in all regards, a joint venture only concerns a single project or a related series of transactions. Here are some other common characteristics of joint ventures: (Kourosh Akhbari,2015)
i.Profits and expenses: Unless otherwise agreed to, joint venturers share profits and losses equally ii.Duration: Unless otherwise specified, a joint venture terminates upon the completion of the project or series of transactions iii.Termination: Unlike a partnership, a joint venture does not terminate upon the death or incapacitation of one joint venturer. Additionally, a joint venturer does have the power to terminate the relationship at any time once the project or transaction is complete. iv.Control: The right of each joint venturer party to control and manage all of the property to be used in the venture
v.Contract: The existence of a contract, whether oral or written, between the parties to engage in the venture together

3.0 Types of Joint Venture in construction Industry

Integrated Joint

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