The formation, structure, and control of joint-venture associations

Abstract

The joint venture appears to have an aura of mystery around it. It is being mentioned more and more frequently in legal and business circles, although its legal form and implications are only beginning, relatively speaking, to be considered. Indeed, to a considerable extent, they are still in the process of evolution. The joint venture is being increasingly used as a form of business association. It is not a new legal concept entirely; rather, it is an adaptation of long-established legal forms. It is a way of doing business long favored by enterprises in developed countries, and is becoming increasingly used by enterprises of developed countries as a form of investment in developing countries. The reason for this increase in popularity is in part economic and political. Until twenty or thirty years ago business enterprises in developed countries were accustomed to complete control of their investment in the underdeveloped world. Thus there was no motivation to think in terms of the joint venture. It is only when these countries achieved political independence that they began to aspire to participate in such business activities and newly sovereign governments were anxious to assert their independence vis-a-vis the foreign investor.