Legal definition[ edit ] In European lawthe term "joint venture" or joint undertaking is an elusive legal concept, better defined under the rules of company law. Is the joint venture intended to generate profits vs.
Of late, joint ventures have become very popular all over the world.
These are companies having two or more partners that is developed through joint efforts of the participating companies.
These companies are established for a common objective for a finite time and equity is raised by participating companies and division of shares is in the proportion of capital invested. Sharing of revenues and assets is a chief characteristic of a joint venture.
On the other hand, a subsidiary is a company in which majority stake is controlled by another company that is called the holding company. There are examples of huge holding companies that are created solely to have control of many other companies. It is not necessary for the parent and subsidiary companies to be doing the same business or even that the parent company be larger than the subsidiary.
Sometimes small companies are able to have majority stake in huge companies becoming holding companies of larger companies. It is possible for a subsidiary to have its own subsidiaries and then the parent and all the subsidiaries are together known as a group. For all practical purposes taxation and legalitiessubsidiary is considered to be a separate entity but in reality, the holding and the subsidiary companies are one and the same at least financially.
Joint ventures can be for a specific project, or they can be on the basis of a long mutual relationship. Sometimes foreign companies chip in with technology and share the revenues. Joint venture is formed when two companies come together for a common objective and make investments to raise the capital.
In a joint venture there is sharing of assets and revenues whereas in case of subsidiary, all benefits accrue to the holding company.In brief: Subsidiary vs Joint Venture • If a company wants to control operations of another company, it can either acquire majority of equity in that company to make it a subsidiary or it can form a joint venture with the company.
In addition to these joint ventures, Sony established a number of successful wholly owned subsidiaries. In , Sony established the chemical manufacturing and marketing subsidiary, Sony Chemicals Corporation; and in , Sony Magnescale Inc., to manufacture the precision measuring instruments used in magnetic scales. Essay on Sony Ericsson from Joint Venture to Wholly Owned Subsidiary The Sony Ericsson joint venture is a case study that can be used to explore key international business strategies and concepts. 1. Under what conditions might a company prefer establishing a joint venture to a wholly owned subsidiary in a foreign country? The Sony Ericsson joint venture is a case study that can be used to explore key international business strategies and concepts. 1. International Joint venture Essay.
Sony Mobile Communications Inc. (Japanese: ソニーモバイルコミュニケーションズ) is a multinational telecommunications company founded on October 1, as a joint venture between Sony and Ericsson, headquartered in Tokyo, Japan and wholly owned by Sony.
One of the vessels, namely the Omega Duke, is owned through a 50% controlled joint venture with Topley Corporation, a wholly owned subsidiary of Glencore International AG (Glencore).They have also formed an equal partnership joint venture company with Topley Corporation, namely Megacore Shipping Ltd.
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C. wholly owned subsidiaries The method of international expansion which presents managers with many threats and is the most expensive due to the high level of foreign investment is the method of international expansion through _____.
Joint ventures are easily recognizable with the name of the JV containing the names of both the companies such as Sony Ericsson, Hero Honda, TATA Sky, and so on. Joint venture is formed when two companies come together for a common objective and make investments to raise the capital.