Joint ventures provide companies with a solid vehicle to come together and pool finances and resources to develop a specific project. If the parties concerned are governed by a well-developed joint venture agreement, there is no reason why the undertaking should not succeed. Sony-Ericsson, now Sony Mobile, is another famous Japanese-Swedish joint venture that develops smartphones that use the know-how of each company in the consumer electronics and telecommunications sector. The Joint Undertaking Agreement defines the rights of each interest group. Majority shareholders or investors will generally enjoy greater voting rights than minority sakemans. However, minority shareholders will typically attempt to negotiate veto rights or insist that some decisions must have the written agreement of all parties before they can be implemented in order to protect their rights on important issues such as the payment of profits and bonuses or the creation of new shares/rights/interests. Regardless of the legal form used for the Joint Undertaking, the most important document will be the JV Agreement, which defines all the rights and obligations of the partners. The objectives of the Joint Undertaking, the initial contributions of the partners, the day-to-day activities and the right to profits, as well as liability for losses incurred by the Joint Undertaking, are all set out in this document. It is important to design it carefully in order to avoid litigation. A joint venture may lead to the creation of a new separate entity or may only be operated on the basis of an agreement between existing undertakings without the creation of a new legal entity.

The latter is called an unregistered joint venture. A joint venture itself is not a separate legal person and is not recognised as such by the supervisory authorities. Joint ventures are carried out by private or legal persons. For example, if the joint venture is a capital company and the two parent companies have the same control over it, they would generally structure the JV in such a way that each parent company has an equal number of shares in the company, as well as equal management responsibility and representation on the board of directors. The contribution of each party (both financial and non-financial) is to be defined in the agreement. . . .