Agreement Between Two Or More Companies To Work Together On A Project
Partners can choose between a 50/50 joint venture, of which the two parent companies hold equal shares in the children`s company, and a majority-owned company. For example, in a predominantly corporate society, one partner could own 80% of the children`s society, while the other partner owned the remaining 20%. A consortium is another type of trade agreement between two or more companies. The main difference between a consortium and a joint venture is that a consortium is generally seen as a more flexible agreement between companies that remain significantly separate. Entities work together on a project – for example, construction companies that build a skyscraper – but do not have much influence over each other. That`s why the various strategic partnerships we mentioned in this article exist between some of the company`s biggest names. Cooperation in a strategic partnership has worked for major players such as Nokia and Microsoft, and with careful planning, it can also work for your business. It`s about taking the leap and saying, “I`m doing” a strategic partnership agreement. If you are thinking about starting a joint venture between your company and another entity, it is important to think about how it might work, particularly in terms of management and taxation.
Now let`s look at each of the five types of strategic partnership agreements. A joint venture may lead to the creation of a new independent entity or it may intervene exclusively on the basis of an agreement between existing companies without the establishment of a new legal entity. The latter is called a non-communal joint venture. One of the most obvious places to see strategic in-action procurement partnerships is the film industry. If you`ve ever noticed that most films list different companies strangely named before the start of the film, it`s because movies are usually made using a supply-chain method. A relatively small production house will provide rotation and post-production, and a larger studio will finance, market and distribute the film. Think of J.J. Abrams` Bad Robot and Paramount Pictures, who maintain such a partnership agreement. If reducing the likelihood of a cultural conflict is the “main transition” to a joint venture agreement, then ancillary contracts of relationship, trust and respect should make it even more viable. Is your company in a strategic partnership? Tell us how it works for you in the comments below. We would be happy to hear your successes in your strategic partnership. A joint venture is a cooperation agreement between two or more companies, which is often in the process of creating a new activity.
Each entity participates in the assets of the joint venture and agrees on the distribution of revenues and expenses. A strategic alliance is an agreement between two companies to carry out a mutually beneficial project, while each company retains its independence.