What is a "joint venture"?

A joint venture is accurately described as a business arrangement where two or more parties come together to pool their resources for a specific task or project. This collaboration often occurs to leverage the strengths and capabilities of each party to achieve a common goal, such as entering a new market, developing a new product, or sharing research and development costs.

Typically, a joint venture involves collaboration in terms of capital investment, expertise, and risk sharing, allowing each participant to benefit from the arrangement while retaining their separate legal identities. This structure encourages innovation and efficient resource management, making it a strategic choice for companies looking to expand their reach or capabilities without fully merging or acquiring another business.

In contrast, the other options describe different business structures or agreements that do not align with the characteristics of a joint venture. For instance, a partnership where one party retains full control does not encourage shared decision-making and resource pooling, which is fundamental to a joint venture. A merger that results in an entirely new company indicates a different kind of corporate structure where entities consolidate rather than collaborate for a specific task. Lastly, a contractual agreement without resource sharing would not fulfill the essential element of collaboration seen in joint ventures, which is the shared contributions towards a common undertaking.