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ass. FA3

ass. FA3

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Published by Hikmah Edi

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Published by: Hikmah Edi on Jun 28, 2010
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06/27/2010

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 NAME : NUR HIKMAH BINTI EDI MATRIK NUM : DIAWEF09070006I/C NUM : 910207145446LECTURERS NAME : MR. ABDUL SYUKOR 
 
 NATURE OF JOINT VENTURE 
 
A
 joint venture
(
JV
, sometimes 'J-V') is a legal entity formed between two or more parties to undertake an economic activity together. It is a term morerestricted to the US and the 'new' countries on the world map such as India andChina.The JV parties agree to create, for a finite time, a new entity and new assets bycontributing equity. They then share in the revenues, expenses, and assets and"control" of the enterprise.The term is not used in the U.K. where 'company law' originates. In Europeanlaw, the term 'joint-venture' is an elusive legal concept, better defined under therules of company law. In France, the term 'joint venture' is variously translatedas 'association d'entreprises', 'entreprise conjointe', 'co-entreprise' and 'entreprisecommune'. But generally,
 societe anonyme
covers' foreign collaborations. InGermany,'joint venture' is better represented as a 'combination of companies'(Konzern)
 
The venture can be for one specific project only - when the JV is referred morecorrectly as a consortium (as the building of the Chunnel) - or a continuing business relationship. The consortium JV (also known as a cooperativeagreement) is formed where one party seeks technological expertise or technicalservice arrangements, franchise and brand use agreements, managementcontracts, rental agreements, for µ¶one-time¶¶ contracts. The JV is dissolvedwhen that goal is reached.
 
FACTOR WHICH IT TO JOINT VENTURE ARE 
y
 
educing 'entry' risks by using the local partner's assets
y
 
Inadequate knowledge of local institutional or legal environment
y
 
Access to local borrowing powers
y
 
P
erception that the goodwill of the local partner is carried forward
y
 
In
s
trategic
sectors, the county's laws may not permit foreign nationals tooperate alone
y
 
Access to local resources through participation of national partner 
y
 
Influence of local partners on government officials or 'compulsory'requisite (see china coverage below)
y
 
Access by one partner to
oreign technology
or expertise, often a keyconsideration of local parties (or through government incentives for themechanism)
y
 
Again, through government incentives, job and skill growth throughforeign investment, and
y
 
Incoming
oreign exchange
and investment.

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