UK Accounting Glossary
In law, a joint venture, commonly abbreviated JV, is a contractual strategic partnership between two or more entities to pursue a business opportunity. The term joint venture implies a specifically defined opportunity, but the scope of a joint venture agreement can be very broad. The partners in a joint venture each contribute resources, in exchange for an equity stake a share in any resulting profits. Sony Ericsson is a noteworthy example of a joint venture. This London-based joint venture leverages the consumer electronics know-how of Japan’s Sony and the telecommunications expertise of Sweden’s Ericsson to make mobile phones. Another well-known joint venture is Cingular Wireless, which was formed in 2001 by SBC and BellSouth. As these examples illustrate, one or more of many possible different rationales, such as business synergy, geographic complementarity, or cost-sharing, can motivate a joint venture.
The university started a joint venture with a local farming cooperative to start a program to train unemployed workers to grow, harvest, and sell produce on the abandoned football field.
Joint ventures between telecommunications companies and software companies have produced amazing innovations in the field of handheld devices.
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This glossary post was last updated: 9th February 2020.