Joint venture

What is a joint venture?

A joint venture is an agreement between existing companies to work together. The companies retain their independence, as well as their own products and services. By working together in a joint venture, you can take on more, larger, or foreign assignments. For example, by sharing knowledge, resources, and networks.

A joint venture can be temporary. For example, for the duration of a project. You can also opt for a permanent collaboration. You record the agreements in an agreement. Sometimes the parties choose to give the collaboration a legal structure. For example, in a partnership, a general partnership (vof), a limited partnership (cv), or a private limited company (bv). The joint venture itself is not a separate legal structure.

Examples of joint ventures

• A set builder often receives requests to also do the lighting for festivals and events. He enters a joint venture with a lighting engineer.
• A translation agency wants to participate in a tender from a government organisation. In addition to translations, the government organisation also needs interpreters. The translation agency forms a temporary joint venture with an agency for interpreting services.
• A mussel grower and a fish wholesaler form a joint venture to mutually increase their range of products.

Why set up a joint venture?

With a joint venture, you can take on projects that you cannot complete alone. For example, due to a lack of money, knowledge, or company resources (such as machines). Another reason for a joint venture may be that you see opportunities in the market. Alone, you do not have enough money to invest in your plan, but together with another company, you do.

Advantages and disadvantages of a joint venture

Advantages:

• You can participate in larger projects, such as a tender.
• You can market a product together.
• You can trade and collaborate with partners abroad.

Disadvantages:

• You may have disagreements. For example, about the distribution of profit or work.
• The interests of one's own companies can cause problems (conflict of interest).
• Co-founders can get into financial trouble. Agreements made can then be jeopardized.

Joint venture agreement

Always record your agreements well to avoid disagreements. For example, agree about the duration of the joint venture and who can decide what. You can sign a cooperation agreement or a joint venture agreement (JVA) for this.

You do not have to register your joint venture agreement or cooperation agreement in the KVK Business Register or any business register abroad. Registration is only required for legal forms.

Read more about establishing agreements for your joint venture on KVK.nl.

Working together abroad

A joint venture is also useful for collaborations abroad. In some countries, there are strict import regulations. As a result, it can be difficult for a foreign company to sell products there. This may be easier with a local partner. Your company provides the product or service. The local company has a network in that country and knowledge of the market, laws, and regulations. You should also find out which rules apply in that country. And agree with your local partner(s) which law (of which country) applies in the agreement.

Are you starting a new company for your joint venture? Then also consider which legal structure you want to use.

Patent and intellectual property

Are you developing a new product in the joint venture? Then you can apply for a patent for it. You can also protect brand names, new techniques, or a design by registering their rights. Make clear agreements about who has the rights.

Read more about working together and protecting intellectual property.