The airlines have been given permission to take a coordinated approach to a range of issues, including pricing, revenue management, schedules, capacity and routes flown.

“The ACCC considers that the joint venture is likely to assist Virgin and Delta to compete more effectively against the incumbents on the routes – Qantas and United Airlines,” said ACCC chairman Graeme Samuel.

He added that the partnership is likely to “give rise to route connectivity benefits for consumers, enhanced route coverage and schedules, and more sustainable competition on the routes”. Another benefit the ACCC saw was access to lower fares on each other’s domestic networks.

The joint venture must still attain antitrust immunity from the US Department of Transportation.

A joint venture is a legal term that describes the relationship between two or more parties entering into an agreement to work towards the same strategic goals while remaining separate entities. Joint ventures occur across most industries where companies may combine forces for a specific project but may even be competitors for others.

An example of how a joint venture works is media joint venture Yahoo7, combining the search engine Yahoo! with Channel 7 in Australia. The ‘Yahoo7’ joint venture is an Australian online strategy only: Yahoo! remains a standalone search engine outside Australia, and Channel 7 still broadcasts in a different medium (television) with no Yahoo! influence. The alliance works on the principle that the strength of their brands combined online garner a higher market share than two separate, smaller brands.

So is a joint venture a partnership? In spirit, yes, but technically, no. A partnership is more integrated, working across all business activities over a long term. A joint venture differs in that it relates to a specific project or business goal, usually with a defined end, that may only relate to part of the business.

For a lot of SMEs, however, joint ventures often relate to the whole enterprise, and could be the only viable option to grow their business without sacrificing what they’ve already built. Commercialisation is thus an important part of the joint venture process, so businesses must be able to identify the value they bring to a relationship—whether that’s IP, market share, or money.

Legal Advice

Commercialisation of an idea is the process you undertake to get your innovation—whether it is in the form of products or services—to the marketplace. Before you seek investment partners, you need to make sure your intellectual property (IP) is protected via either registered rights, such as patents, trademarks and designs, or unregistered rights, like copyright and confidentiality agreements.

Seeking legal advice early is crucial to the future success of any joint venture that may result from your commercialised idea. Your protected IP is what will attract potential partners, the ‘dowry’ that you bring to the joint venture marriage.

Finding the Right Investor

Expanding your business or market via a joint venture is an arrangement that involves an investor, usually a venture capitalist, given a share of the business in return for investment capital, rather than receiving payment. There are a number of issues—financial, strategic and emotional—that must be considered before a business enters a joint venture arrangement, and covered in the shareholders agreement, a document outlining the rights and responsibilities of each party.

The investor usually requires an exit mechanism (usually 3–5 years) that capitalises on the initial investment, preferred rights to shares making them a priority creditor should the venture fail, and some control over the company’s activities, including a position on the board of directors, power to appoint a CEO or other key employees, and influence in major business decisions.

Other types of joint ventures may involve one or more other businesses complementary to yours to gain mutual benefit. It could be that your product forms a vital component of another, so it makes sense to share the risks and returns in a joint venture partnership with the other company.

Joint ventures needn’t be 50-50, but the proportion must be defined as each party provides equity, undertakes risk and receives return in relation to their contribution.

Read more for joint ventures and IP and international joint ventures…

CEPA VI, signed earlier this month, contains 29 liberalisation measures to facilitate trade and investment between Hong Kong and China.

“This represents another strategic move in the long term development of Hong Kong as the international financial centre for the mainland,” said Peter Wong, chairman of the Hong Kong Association of Banks, and HSBC Group general manager.

Guangdong province will be the recipient of many of the pilot initiatives, which will include the ability of Hong Kong banks to expand by opening sub-branches there. Additionally, qualified Hong Kong and mainland securities firms will be allowed to set up joint venture securities investment advisory companies.

In addition to liberalisation measures, CEPA now also includes two new sectors: research and development and rail transport.

The additions come into effect on October 1, 2009.

The flour mill, located in Picton, NSW, just south of Sydney will operate 24 hours a day, seven days a week to process approximately 200,000 tonnes of wheat and maize per annum.

The joint venture will require 150 employees during the construction phase, and need a staff of 30 to operate after it has been commissioned.

Cargill, now the second largest private corporation in the United States, employs 160,000 people in 67 countries.