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In general, a joint enterprise describes a common purpose or activity that two or more parties are undertaking together. Joint enterprises are usually entered into for the purpose of making money, such as a business joint enterprise. This is not always the case, however, as some joint enterprises do not bring in a profit. For instance, a celebrity may agree to visit all of the schools in a certain school district to lecture the children about reading. The school district and the celebrity would be undertaking this venture jointly, although not for profit.
The business arena houses many types of joint enterprises. For example, a law firm partnership or a company started by two brothers are each joint enterprises. By and large, each party entering into a business joint enterprise has some rights, such as the ability to make investments, manage or work at the company, and take out debts on behalf of the company. Most partners also share profits and losses; they can be divided equally or however else the parties wish. Businesses may also enter into strategic joint enterprises in which they share competitive information, intellectual property, and markets.
A joint enterprise can create additional liability for each party involved in the enterprise. In some jurisdictions, for instance, the parties to a joint enterprise may be deemed to have joint and several liability for the enterprise’s actions. Joint and several liability occurs when each of the parties in the enterprise are either individually or mutually responsible to third parties. This means that one partner could be liable in a civil lawsuit for actions taken by another partner on behalf of the enterprise.
For instance, suppose that Max and Millie have opened a clothing manufacturing company and that Millie signed a contract in which the company agreed to supply 1,000 sweaters to a retailer by a certain date. If the company fails to provide the sweaters, the retailer could sue Max, Millie, and the company. Max and Millie would each be liable to the retailer for any damages associated with failing to provide the sweaters, even though only Millie signed the contract.
The concept of a joint enterprise is sometimes carried over to criminal law. In this context, it is used to denote a situation where two or more people have conspired or cooperated in carrying out a crime. For example, suppose that Max and Millie decide to rob a convenience store. They have agreed that Max will go in and rob the store while Millie drives the get-away car. This robbery would be carried out as a joint criminal enterprise.
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