What constitutes a joint venture?

A joint venture is characterized by an agreement between two or more parties to collaborate on a specific project or business activity while maintaining their respective identities. The essence of a joint venture lies in the shared operational control and contributions of resources by the involved parties, which aligns with the concept of collective control over the venture.

This means that the parties work together in managing the joint venture, usually contributing capital, expertise, or technology according to the terms of the agreement. Each party typically shares in the risks and rewards of the venture, making decision-making a cooperative process rather than one dominated by a single entity. This structure allows for synergies and shared knowledge, facilitating the successful pursuit of mutual objectives.

The other answer options describe scenarios that do not align with the fundamental nature of a joint venture. For instance, ownership of more than 50% of shares suggests control by a single entity rather than a partnership model. Independent investment without influence does not imply any collaborative effort or shared management, which is essential in a joint venture. Exclusive control by one party contradicts the very definition of a joint venture, as it would negate the concept of joint management and shared control that is critical to the arrangement.