A Development Project is a commercial alliance between two or more separate entities that enables them to share risk and reward.
A new business is created to which each party contributes resources such as land, capital, intellectual property, skills, credentials or equipment.
Development Project are commonly used to:
Enable smaller companies to deliver large projects by combining their expertise and resources.
Enable a larger company to acquire new resources or expertise from a smaller company.
Enable a smaller company to benefit from the credibility and financial stability of a larger company.
Gain local knowledge in overseas markets.
To share risks and costs.
Development Project are becoming more common, encouraged by initiatives.
The structure of a development project will depend on the degree to which the parties wish to integrate. Typical structures for joint ventures are:
Limited liability company: creates an entirely separate legal identity from shareholders.
Partnership: equity is owned by two or more parties who are jointly and separately liable for all of the debts of the business.
Limited liability partnership: liability for debts is limited to the amount of the investment.
Contractual agreement.
