A Joint Venture is a group constructed between two or more parties with the expectation of pooling resources to carry out distinct economic activities or projects jointly. The term Joint venture was first used in conjunction with the rail system in the United States in the late 19th century. Shareholders agree as a group by contributing share ownership, which then sends the shares under the income, expenditures and control of the company. This usually refers to the objective of the group, not the type of group. Thereafter, the Joint Venture can evolve into a law firm, partnership, LLC or other law firm depending on the number of considerations such as tax penalty and loss. Public joint ventures in the oil and gas sector, and law firms between mostly local and foreign companies. Since foreign companies can improve their expertise by giving a geographic presence, joint ventures are frequently seen as a very lucrative business option in this area. Various studies show a loss rate of 30–61%, with 60% declining to start or fade within 5 years. In developing countries, joint ventures are more unstable and Joint Ventures involving government partners are more likely to fail, private companies seem better suited to support significant expertise, marketing networks, etc. Some countries, such as China and India, are asking foreign companies to form Joint Ventures with domestic companies to enter the market. These provisions often encourage the transfer of technology and management control to domestic partners. Most Joint Ventures in Asia fail because of cultural discrepancies. Collective efforts fail for a variety of reasons, including an absence of communication between management and the distribution of employees.

Sruthy Santhosh

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