Joint ventures involve two or more parties working together for a common purpose, often for profit. They can also be non-profit, such as a celebrity teaching in schools. Partners have certain rights and may share profits and losses. Joint ventures can create additional liability, and partners may be held jointly and severally liable. In criminal law, joint ventures can refer to situations where multiple people conspire to commit a crime.
In general, a joint venture describes a common purpose or activity that two or more parties are undertaking together. Joint ventures are usually entered into for the purpose of making money, like a joint business venture. However, this is not always the case, as some joint ventures do not generate profits. For example, a celebrity may agree to visit all schools in a particular school district to teach reading lessons to children. The school district and the celebrity would undertake this venture together, albeit not for profit.
The business arena hosts many types of joint ventures. For example, a partnership in a law firm or a company started by two brothers are both joint ventures. In general, each party entering a joint venture has certain rights, such as the ability to make investments, manage or work in the business, and incur debt on behalf of the business. Most partners also share profits and losses; may be divided equally or however the parties wish. Companies can also enter into joint strategic partnerships where they share competitive information, intellectual property, and markets.
A joint venture may create additional liability for each party involved in the venture. In some jurisdictions, for example, the parties to a joint venture may be held jointly and severally liable for the actions of the venture. Joint and several liability occurs when each of the parties to the enterprise is individually or mutually liable to third parties. This means that one partner could be liable in a civil suit for actions taken by another partner on behalf of the business.
For example, let’s say Max and Millie started a clothing company and Millie signed a contract in which the company agreed to supply 1,000 sweaters to a retailer by a certain date. If the company doesn’t supply the sweaters, the retailer could sue Max, Millie and the company. Max and Millie would be liable to the retailer for any damages associated with not supplying the sweaters, even if only Millie signed the contract.
The concept of mixed company is sometimes reported in criminal law. In this context, it is used to mean a situation where two or more people have conspired or cooperated in the commission of a crime. For example, let’s say Max and Millie decide to rob a convenience store. They agreed that Max will go rob the store while Millie drives the getaway car. This robbery was allegedly carried out as a joint criminal enterprise.
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