BMF – Nov 2021 – L1 – SB – Q2b – Business and Organizational Structures and Choices

Explanation of two ways by which a joint venture can be created in Nigeria.

Question

Explain TWO ways by which a joint venture can be created in Nigeria.

Answer

Contractual agreement: A joint venture can be created through a formal contract between the participating businesses. This agreement outlines the terms of the collaboration, including responsibilities, profit-sharing, and contributions.
Incorporation of a new entity: Alternatively, a new entity can be incorporated, where the participants contribute resources and capital, with the entity being a separate legal entity from the participants.