09 Feb Who Are the Parties in a Joint Venture?
By: Barry E. Haimo, Esq.
February 9, 2017
Who Are the Parties in a Joint Venture?
A joint venture is a unique type of business partnership that allows you to work together with another person or business or entity – or multiple entities – to accomplish specific limited or long-term goals without unnecessarily marrying your business. Put another way, they are a codified way that two or more entities can work together to reach common goals.
Who can be involved in a joint venture? The parties in a joint venture may vary, and can include:
- Established businesses
- Non-profit organizations
The agreement that brings these parties together to form a joint venture and work on their common goals may be verbal, oral, or written. A joint venture (JV) is really what those involved make it out to be, because there just aren’t as many restrictions on joint ventures as there are on other types of partnerships or business ventures.
Examples of Joint Ventures
Below are a few examples of larger joint ventures in which entities came together for a wide range of goals and where the joint venture served many different purposes. Your joint venture does not have to be as large as these, but hopefully these examples will give you an idea of why joint ventures are formed and the different parties that can come together to be in a joint venture. Please note that not all joint ventures become formal legal business entities. Rather, some may operate as general partnerships.
Sony-Ericsson: Ericsson is a Swedish company that manufactures telecommunications equipment. The company previously got chips from Philips, a Dutch technology company. In March of 2000, however, a fire destroyed the Philips manufacturing plant, and Ericsson had to look elsewhere.
They settled on getting chips from Sony, a mobile phone manufacturing company. Sony-Ericsson formed in October 2011 and has grown to be a multinational telecommunications company.
Dow Corning – In 1942, airlines were having a problem flying at higher altitudes. They had been using glass from Corning, an American glass manufacturer, and it had been leaking a discharge that was creating ozone and preventing planes from flying at ideal altitudes.
In 1943, Corning decided to pair up in a joint venture with the Dow Chemical Company to solve these issues. The Dow Corning Company is equally owned by Dow and Corning, and has grown to produce products of their own: sealants, rubber, liquid silicone, and more.
Hulu – You may use Hulu on your Apple TV or computer to watch your favorite television shows or movies. The subscription video on demand service is actually a joint venture that was formed in 2009.
The original partners involved in Hulu were The Walt Disney Company (through Disney-ABC Television Group), 21st Century Fox (through Fox Entertainment Group), and Comcast (through NBCUniversal). In 2016, Time Warner Cable decided to get in on the action. It has a minority stake in Hulu (10%).
Smaller Joint Venture Examples – Not all joint ventures are going to include multinational companies. On Inc.com, Marla Tabaka shares an example of a joint venture she formed when she owned a coffee shop in Naperville, Illinois.
She formed a joint venture with a major drugstore across the street in order to combine marketing efforts. The two stores had coupons and deals for each other in order to drum up business for both. This is a simple example of a joint venture.
Want to learn more about forming a joint venture in Florida? Schedule an appointment with an experienced Florida business planning attorney today.
Barry E. Haimo, Esq.