Characteristics of Joint Ventures
Joint ventures have a number of characteristics in common which can be summarised as follows: (Vaughan, 2010):
- Contractual agreement: joint ventures are established by contracts between two or more individuals or organisations consisting of one or more agreements for a specific business purpose.
- Specific limited duration and purpose: joint ventures are formed for a specific business purpose and for a specific time period.
- Joint property: each partner in a joint venture contributes property, cash, organisational assets or other assets, for a specific business purpose.
- Common goals and incentives: partners in joint ventures have common expectations in terms of financial and intangible goals for a specific time frame.
- Shared profits, losses, management and control: participants in joint ventures share identified profits, losses, management and control issues within the partnership.