Page 2 - Home Assignment 15

• An equity joint venture agreement is one in which a separate business entity,

jointly owned by two or more parties, is formed in accordance with the

agreement of the partiesJoint Ventures.

• The Forms of business entity may vary.

• Features:

▪Agreement to either create a new entity or for one of the parties to join into

ownership of an existing one.

▪Shared ownership by the parties.

▪Shared management.

▪Shared responsibilities regarding capital investment and other

financingarrangements.

▪Shared profits and losses according to the agreement.

Contractual Joint Venture

There is only an agreement to work together.

• The parties do not share ownership of the business but exercise some elements

of control in the joint venture.

• Features:

▪Two or more parties have a common intention of running a business venture;

▪Each party brings some inputs

▪Both parties exercise some control on the business venture