Formation Analysis Of A Joint Venture

Joint venture is an agreement between two or more parties to gather or pool resources together so as to accomplish a specified goal. The main objective is to implement a new business idea or project. The venture is a separate entity from the participants and their businesses. However proceeds, losses and costs incurred from the activities of the venture, the participants are responsible.

A foreign investor may enter into a joint venture by combining with a national of a host country to create a new entity or by acquiring a portion of an existing local entity.

When the companies joining create a separate organization to create their product, the enterprise is called a joint venture.

At times, individuals with similar business interest may form a partnership in order share responsibility and resources in operating a business. On the other hand, a partnership can be formed where one individual is solely a financial partner, while the other may be an operating partner. Partnerships come with their advantages and disadvantages as well. The advantages of partnerships are they are easy to establish, combines the skills and resources of two or more people and increases the ability to raise funding for the business. The disadvantages of partnerships are; profits must be shared, increased possibility of conflict, interdependence of decision making and unlimited liability. Regardless of the arrangement, partnerships are an excellent opportunity for individuals to join together and use their resources, finances and talent to create a successful business.

Ring the Bell company faces fierce competition in this market since Ring the Bell is relatively a newly established company. Its competitors include local delivery company---On the Way and Food Solution. In addition, Serve your meal may also be included.

With the overall sale of their products on the rise in the emerging markets, Jaguar Land Rover (JLR) opens its first ever full manufacturing plant in the region, the first outside England. With great aspiration to develop their own car infrastructure market and compete with the like of (JLR) other Multi Nationals Corporations (MNC), the Chinese government made joint venture the only viable means to enter their growing emerging market, so that their local car manufacturers learn the (MNC) way of doing business. A joint venture has been defined as the collaboration of more business organisations in which they split everything necessary to run a business. Additionally, these (MNC) run the risk of having their designs copied and their

Joint venture is identified as a topic of study because of the massive rise in international joint ventures during the business globalization and because of the different joint venture accounting practices across countries. The increasing trend to produce financial statements which are free from errors and misstatements lead to the competitiveness of various firms when it comes to abiding with the proper disclosures set forth by the International Accounting Standard. These disclosures requirements are designed to guide different firms into coming up with a financial

A partnership, Consists of two or more people who share the ownership of a single business. Like in a proprietorship, the law does not distinguish between the business and its owners. The Partners should have a prearranged agreement of how decisions will be made for their company, the profits will be shared, how disputes will be resolved, how new partners will be brought into the partnership, how partners can be bought out, or what steps will be taken to dissolve the partnership when needed. Although it sounds silly thinking about dissolving the company before its started, many companies break up in times of

As every business organizations, a General partnership has some disadvantages and advantages. Shortly, the main advantages are its velocity and facilitation to start up the business; then there is a

The advantage of the partnership is partners have to support the business with start-up capital, meaning the number of partners is higher, the more money will be put into the business, which allows more potential to grow the business. Secondly, partners could split the work according to their different talents which mutually benefit each other. Also, as long as the partners reach an agreement since the partnership is less regulated strictly than companies, it is easier to form, manage and run.

In a general partnership, the partners of the business share the profits and losses in accordance with their partnership agreement. In this particular entity formation, all partners are able to participate as managers of the company. Each managing partners have unlimited personal liability and full authority to conduct business on behalf of the general partnership. No formal paperwork needs to be filed in order to form a general partnership, and a partnership agreement is not required either; however, co-owners should clearly set out in advance each partner’s upfront and potential future contributions, level of involvement in the business and precisely what will happen in the event of a liquidation (2).

While many companies are formed by investors, best friends, or family members it is always a good idea to register the company and make it a legal partnership. Partnership agreements serve several purposes, but mostly it will benefit all parties involved. In this scenario, assuming Chad wants equal decision making rights but not the liability of the company’s debt LLP is a good option to register the company under, also assuming that Dad wants the same for his son Chad. For instance, “In a limited partnership certain members contribute capital but have limited liability for firm debts. The most these members can lose is their investment.” Twomey, (2013). In this case Chad seems to want equal partnership because he is suggesting to his Dad to form the partnership. However, if they do move forward and form a legal partnership they should establish the company as Dad and Chad Expert Handyman Service LLC not LLP. The reason? A company that is registered under LLC have “a favorable tax ruling on this form of organization by the Internal Revenue Service” Twomey, (2013). The difference between an LLC and a corporation, is that the LLC does not pays no federal taxes on its income as an entity. However, the “income (or losses, deductions, and credits) flows through to the LLC’s owners based on their proportionate interest in the company.” Twomey, (2013). Another benefits of having the company registered as an LLC is that the Dad and Chad have limited liability for their business 's

This report entails a detailed analysis of how three friends should set up their business. It starts by the definition of a General Partnership (unincorporated) and Limited Liability Company (incorporated). It furthermore goes into the disadvantages and advantages of each as well as the comparison between both. It concludes with a recommendation as to how the friends should set up their business.

According to Jones (2011) a joint ventures is a “strategic alliance among two or more organizations that agree to establish and share the ownership jointly of a

As it has said, there are very good reasons to decide starting a Joint Venture. Joint ventures as a strategic alliance between companies present lots of benefits for the different parties. They allow to spread the risk between the venture partners. The co-ventures agree to share profits and losses depending on the risk taken by each of them. It allows flexibility due to its nature. Flexibility setting the limits of the business, in structural organization and in decision making processes, overall in comparison with its parent companies. They also facilitate the access to resources. Here it is included, as well, financing, the specialized staff and technology. This is an opportunity to gain new capacity and to benefit improving the ability and