![]() ![]() Sometimes a careful party will wish both…a limited liability entity with a shareholder’s agreement is not uncommon. The alternative method is to create a long term contract between the two entities spelling out duties and division of proceeds and protection of intellectual property. The typical structures are the creation of a partnership or limited liability entity in the foreign locale which is owned by both entities. ![]() Or two companies with equal skill sets but without sufficient economic capital combine their capital to engage in entry into a market or to build a production site. ![]() An American company with intellectual property may wish to enter a foreign market and has neither resources, contacts or the skill set necessary so approaches an Indian or Indonesian company to create some sort of relationship to market the product in that country. Typically, a Joint Venture (“JV”) exists so that two parties can combine resources, contacts, skills and assets to better exploit a particular market. What used to be required by certain foreign governments (such as China) has become quite often the preferred methodology of entry into a market by the United States company.īut there are problems and issues that must be confronted before a joint venture is undertaken and this article shall outline some of the most pressing questions that a company must confront and suggest some solutions that can maximize the benefits and minimize the risks of utilization of such joint venture. The advantages of having local expertise and personnel without having to directly enter a foreign market is quite appealing to many American companies and the sharing of resources and intellectual property can be an added inducement. A company in the United States which wishes to enlarge its operations abroad or obtain (or share) some intellectual property in a market unfamiliar to it will seek a “partner” in the other jurisdiction to engage in what is often a long term business venture in that locale. Modern day use of the Joint Venture has enlarged its scope so that it is a typical means of engaging in business in a foreign country. Twenty years ago a joint venture most often occurred in domestic construction projects by which two or more companies would join forces for a particular piece of construction, sharing the responsibilities and revenues, with the joint venture ending when the job was completed. ![]()
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