Regardless of the legal structure used for the joint venture, the most important document will be the Joint Enterprise Agreement, which defines all the rights and obligations of the partners. The objectives of the joint venture, the first contributions of the partners, the day-to-day activities, the right to profits and the responsibility for the losses suffered by the joint venture are outlined in this document. It is important to design it carefully to avoid litigation along the way. A joint venture is a joint venture whereby two or more parties agree to pool their resources for a specific mission. It may be a new project or some other business activity. The other format of the CJV is similar to a partnership in which the parties jointly assume unlimited liability for the company`s debts without a separate corporation. In both cases, the status of the company formed is that of a Chinese legal person who can directly engage the work as a z.B a Chinese national interlocutor. The minimum capital is recorded at different investment levels. If all parties totally dare, a joint venture could theoretically be organized by a simple handshake. But all companies that opt for a joint venture would be wise to outline the terms of the company in a signed contract, created with the assistance of a lawyer. Sign a joint venture agreement if you intend to pool resources with another entity to pursue a common goal, especially when it comes to sensitive information or incentive agreements. Once the joint venture (JV) has achieved its objective, it can be liquidated or sold like any other business.
Microsoft Corporation (NASDAQ: MSFT) sold its 50% interest in Caradigm in 2016, a joint venture established in 2011 with General Electric Company (NYSE: GE). The joint venture was created to integrate Microsoft Amalga Enterprise Healthcare`s data and intelligence system with a variety of GE Healthcare technologies. Microsoft has now sold its stake in GE, virtually ending the joint venture. GE is now the sole owner of the company and is free to continue the business as it sees fit. If the joint venture results in the creation of a new entity, it can be structured as a company, limited liability company or company. For example, if the joint venture is a company and the two founding companies want the same control, they would generally structure the joint venture so that each founding company has an equal number of shares in the company as well as equal management responsibility and representation on the board of directors. Until recently, there were no guidelines on how foreign investment should be made because of China`s restrictive nature vis-à-vis foreign investors. Following Mao Zedong`s death in 1976, initiatives began to be implemented in foreign trade and existing foreign direct investment legislation was clarified in 1979, while the first Sino-foreign enterprise took place in 2001.  The body of the law has improved since then.
A Qualified Joint Venture (QJV) is a kind of federal income tax system for spouses who run a partnership business.