Short definition: A joint venture is a business arrangement where two or more companies agree to pool their resources and expertise to achieve a specific goal or project.
Explanation: In a joint venture, the participating companies typically form a new entity and share ownership, management responsibilities, profits, and losses. Joint ventures can be a strategic way for companies to enter new markets, share risks and costs, and access new technologies or expertise.
Example: A pharmaceutical company and a biotechnology company might form a joint venture to develop and market a new drug.
Additional information (optional): Joint ventures can be structured in various ways, and the terms of the agreement can vary depending on the specific goals and needs of the participating companies. They can be short-term or long-term, and the new entity created can be a separate legal entity or a contractual arrangement.