Created as a commercial arrangement among two or more companies, in order to facilitate the exchange of means and resources among them and act in the market as one sole company.
This new company has its own legal personality and has similar characteristics as a SrL (limited company). However, there is no compulsory capital stock. It also benefits from simple tax procedures.
VALUES AND FUNCTIONS:
- Investment risk sharing among members, which reduces costs.
- Appealing when the investment cost of entering the market is high.
- Relevant in Italy, given the numerous specific commercial mechanisms required.
- Capable of creating benefits quickly.
- Eliminates entry barriers that may exist in several markets.
- Flexibility regarding the types of agreements concluded.
- Its success resides in the Business Plan agreed by the JV members.
- Structure and management decided in the constitutive statutes.
- Supervision body necessary to evaluate its progress.
Given the multiple possible commercial agreements, it is impossible to give a standardized procedure for JV. For this reason, only the general aspects of the joint venture’s constitution are shown:
- Previous study of the company’s business sector in the Italian market.
- Identification of possible Italian business partners for the JV agreement.
- Previous financial study of each possible partner.
- Contact with chosen partners.
- Negotiations with partners and preparation of the agreement, according to legislation.
- Preparation of constitutive act with notary.
- Tax and fiscal assistance regarding the JV.