A joint venture or partnership agreement is an arrangement in business in which two or more parties invest together to accomplish an undertaken project. Business assignments pertaining to joint ventures or partnership agreement are an important part of business management curriculum. In a joint venture or partnership agreement, each partner is responsible for all the profits and losses. Joint ventures or partnership agreements are not associated with other businesses of the partners.
What Are The Benefits Of A Joint Venture Or Partnership Agreement?
There are many benefits of a joint venture or partnership agreement. These can be listed below:
- These are temporary agreements between the parties. They can be dissolved at any time without any complex legal procedures.
- The parties in the joint venture or partnership agreement have access to additional resources. This is because they have joined hands for achieving a common goal for the benefit of each other.
- It gives the facility to achieve a target which a company could not achieve alone. The resources put together can accomplish a task which was not possible for a single company.
- The risk and costs can be shared by the parties. This reduces the burden on the companies. These risks may land a company in bankruptcy if working alone.
- There are much better chances of business growth and development. The name of the joint venture sometimes becomes a household name such as Hero Honda, Sony Ericsson etc.
What Are The Disadvantages Of A Joint Venture Or Partnership Agreement?
There are various disadvantages of a joint venture or partnership agreement. The most common are listed below:
- When parties from different business environments come together, it becomes difficult for them to adapt themselves in different working conditions, workplace cultures, and management styles.
- When a party in the joint venture or partnership agreement is poor in making tactical decisions, it will affect the whole joint venture or partnership negatively. It will result in the poor outcome of the products sales or services.
- If any party in the joint venture or agreement lacks in commitment to work, there will be the negative impact on the joint venture or agreement. The desired results will not be obtained and the growth and development will be affected. No doubt, this may end in the winding up of the joint venture or the partnership.
As we can see there are both advantages and disadvantages of getting into a joint venture or partnership agreement. To overcome the problems arising in getting involved in joint ventures or partnership agreement, one should follow certain instructions as listed below:
- Getting legal and financial advice is always important before getting into any joint venture or partnership agreement.
- It is also advisable to have a well-drafted agreement stating clear guidelines of it and having clear facilities for disputes resolution.
- A written agreement has formal expectations between the parties and lays a strong foundation for future relationships.
Entering into a joint venture or a partnership agreement needs expert guidance. It may be legal or financial guidance which helps both parties understand the key contents of the agreement. Both parties should be well aware of the terms and conditions laid down in the papers or the documents. At BookMyEssay, our business structure specialists help in various procedures appointed in the joint venture or a partnership agreement. This includes expert assistance in the drafting of the agreement, reviewing the agreement and negotiating the terms and conditions of the agreement. BookMyEssay.com helps in deciding methods to solve any problems arising due to joint ventures or partnership agreements. Check out all the options related to business assignment help here at BookMyEssay.