Joint Venture Vs Distribution Agreement
Co-marketing agreements offer a multitude of ways to expand your business. They allow business owners to increase distribution and revenue while taking advantage of the strengths of others, while offering a better offer to users. But at some point, there is a longer-term initiative – the joint venture. Joint ventures have many advantages for traditional co-marketing agreements, but they also present considerable disadvantages and risks. In order for you to be able to decide which form of joint venture is best for you, you should consider participating in administration. You should also think about what might happen if the business goes wrong and how many risks you are willing to accept. Before starting a joint venture, the parties involved need to understand what they all want from the relationship. A joint venture is a form of partnership (not necessarily in the legal sense) in which two or more parties agree to conduct a business, operate a product or service, or jointly market their respective products and services as part of co-marketing. A joint venture can be documented by an agreement between the parties, by the creation of a more formal partnership or by the formation of a limited liability company or other company that the parties wish to use for the completion of the transaction or for the activity or common market of one or more products or services. For example, Hulu is a joint venture of NBC, Fox and Disney, and Vevo is a joint venture of Sony Music, Universal Music and Abu Dhabi Media (to create a Hulu for music videos!). Management co-marketing agreements have both parties to help time and resources, but it is usually done by their respective corporate efforts. A joint venture often refers to the management of one or all of the joint venture or, in many cases, independent management. Sometimes the parties appoint a board of directors consisting of all the joint ventures, while only one party runs the business.
In any case, the joint venture takes its own life, among other things, through such a combined management structure. Your business, your partner`s business and your markets change over time. A joint venture can adapt to the new situation, but sooner or later most partnership agreements end. If your joint venture has been created for a particular project, it will end naturally when the project is completed. Joint ventures, while a partnership in the familiar sense of the word, can adopt any legal structure.