Joint venture contract
Introduction
A joint venture or consortium (also known as joint venture[note 1]) is a type of long-term joint investment business agreement between two or more people (usually legal entities or traders),[1] who are called venturers or partners. A joint venture does not have to establish a separate company or legal entity. It is also known as "shared risk", because two or more companies join together to form a new one in which a product is used taking into account the best market tactics. These maintain their autonomy, and are strategically used to create a new brand or a new entity. The objective of a "joint venture" can be very varied, from the production of goods or the provision of services "Service (economy)") to the search for new markets or mutual support in different links of a product chain. It is developed for a limited time, with the aim of obtaining economic benefits for its development.
To achieve the common objective, several companies agree to make contributions of various kinds to that common business. The contribution may consist of raw materials, capital "Capital (economy)"), technology, market knowledge, sales and distribution channels, personnel, financing or products. In other words, it is exchanged: capital, resources or simple know-how (that is, experience). This alliance will not imply the loss of identity and individuality as a legal entity.
Etymology and use
The two English words that make up the term joint venture mean, literally translated, "joint" or "union" and "venture" or "risk", respectively. This foreign term is not included in the Dictionary of the Spanish language of the Royal Spanish Academy, but it does appear in specialized works, such as the Dictionary of banking terms, with the meaning of "two companies that come together for a common business." It is frequently used in the specialized press.[2][3] The Fundéu recommends replacing it with the terms joint subsidiary, joint company or common business.[4].