Advantages and disadvantages of joint ventures
Advantages:
1, which is beneficial for investors to reduce investment amount and investment risk;
2, it is beneficial to adapt to different market demands;
3. It is beneficial to make use of and give full play to the advantages of all parties, which is a better development of enterprises;
4. Conducive to the expansion of enterprise scale;
5, conducive to the expansion of sales channels.
Disadvantages:
1. Shareholders have less control rights, and their rights are distributed in proportion to the joint venture amount;
2. There are many viewpoints, which are not easy to integrate;
3. There are many regulatory departments to report troubles.
joint venture
A joint venture refers to an enterprise invested and established in the name of the state, enterprises and individuals as a legal person investor. When the enterprise is established, all the assets invested by the owner are recorded as paid-in capital.
Generally speaking, a Sino-foreign joint venture is an enterprise which is jointly funded by China investors and foreign investors, operated jointly by them, gained and lost, and took risks. Foreign investors can be enterprises, other economic organizations or individuals. China joint venturers are limited to enterprises and other economic organizations, excluding individuals and individual enterprises. With the approval of the examination organ, the joint venture is a legal person in China, which is governed and protected by the laws of China. Its organizational form is a limited liability company. The joint venture cannot issue shares yet, but it will share the profits and losses in proportion to the investment of the parties to the joint venture.
state-owned enterprise
State-owned enterprises refer to wholly state-owned enterprises, wholly state-owned companies and state-owned capital holding companies that perform the investor's duties on behalf of the country respectively with the local people's governments, including enterprises at the same level and enterprises formed by gradual investment under the supervision of organizations, local state-owned assets supervision and administration institutions and other departments.
State-owned enterprises have ownership or control over their capital, and the will and interests of the government determine the behavior of state-owned enterprises. State-owned enterprises are the backbone of national economic development and the pillar of Socialism with Chinese characteristics.
As an organizational form of production and operation, state-owned enterprises have both commercial and public welfare characteristics. Their commerciality is reflected in the pursuit of maintaining and increasing the value of state-owned assets, and public welfare is reflected in the fact that state-owned enterprises are usually set up to achieve the goal of national economic regulation and control and play a role in coordinating the development of all aspects of the national economy.
According to the authority of state-owned assets management, state-owned enterprises are divided into organizational enterprises (state-owned enterprises that organize government supervision and management) and local enterprises (state-owned enterprises that are supervised and managed by local governments). For individual organizations and enterprises, their responsibilities in the process of national social and economic development are special and belong to direct management. These organizations and enterprises belong to the ministerial level.