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Joint Ventures

Joint Venture Liability

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Joint Venture Liability

Mitigating joint venture liability is key to the success of a business joint venture. Joint venture liability has an internal component (e.g. co-venturer) and external component (e.g. creditors). This article provides a brief overview of joint venture advantages and how joint venture law is used to reduce liability and maximize joint venture benefits. Effective mitigation through joint venture due diligence is discussed with a quick look at joint venture intellectual property. Finally, mitigation of joint venture liability in the international business joint venture context is surveyed. Contact Saboor H. AbdulJaami for help navigating joint venture law.

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Ownership and Control in Joint Ventures

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Abstract

Joint ventures afford unique opportunities to study how firms assert rights over jointly used assets because parents clearly delineate control. We argue that ownership allocations trade off investment incentives with control related inefficiencies. We show how residual control rights can create a discontinuity in parent incentives that explains the observed clustering of ownership at 50-50 and 50-plus-one-share equity allocations. At the same time, the incentive benefits of ownership preserve a rationale for a wide spectrum of asymmetric shareholdings. Analyzing the determinants of ownership in US joint ventures, we find that, consistent with our model, the higher the potential for unilateral value extraction the more parents to prefer equal shareholdings regardless of their attributes. Similarly, parent-specific spillovers make 50-50 ownership more attractive to the detriment of one sided control whereas complementarities in parent resources have the opposite effect.preferred

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Joint Ventures: Membership, Types And Termination

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MEMBERSHIP

In a preceding article,' the origin, nature and development of joint ventures, and the distinctions and differences the courts have made between these associations and partnerships were discussed. In the present article, members of joint ventures, their rights and duties, usual types and termination of the venture will be examined.

An important aspect of membership in a joint venture is that, according to the decisions, the same rules as to contractual capacity which govern other simple contracts also apply to those by which joint ventures are created. Without a contract, there can be no joint venture as between the participants:

The sine qua non of the relationship is a contract, whether it be express or implied. As a legal concept, a joint adventure is not a status created or imposed by law, but is a relationship voluntarily assumed and arising wholly ex contract.

The joint venture contract does not need to be either formal or express but there must be a consensus ad idem. In...

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