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Joint Venture

Meaning: 

A Joint Venture (JV) is defined as a business arrangement where two or more companies or individuals collaborate on a specific project or business activity, sharing profits, losses, and control.

Why Is It Important:
Joint ventures allow companies to expand their operations without taking on all the risks alone.
They combine expertise, technology, and resources, making them more competitive

How to understand a Joint Venture:
By sharing costs, companies can reduce their financial burden on large projects.
Joint ventures enable easier entry into new markets, helping businesses grow.


Types of Joint Ventures:

Project-Based JV:
Created for a specific project.

Functional JV:
Focuses on a specific function like production or research and development (R&D).

Equity JV:
Partners invest capital and share ownership.

Contractual JV:
Based on agreements without forming a new company.

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