14 Disadvantages Of Joint Venture

1. Vague objectives: The objectives of a joint venture are not 100 percent clear and rarely communicated clearly to all people involved. 2. Limited Outside Opportunities: It is common for joint venture contracts to limit the outside activities of participant companies while the project is in progress. 3. Liability: One of the biggest disadvantages of a joint venture is that the structure offers no liability protection to the parties involved. 4. Equal involvement is impossible. 5. Different cultures and management styles result in poor integration and co-operation. 6. It takes time and effort to build the right relationships and partnering with another business can be challenging. 7. Flexibility can be restricted. 8. The partners bring in different levels of expertise, investment or assets into the venture. 9. Creating a joint venture may result in more complex tax arrangements.