Series 22: 1.1.6. Joint Ventures

1.1.6.  Joint Ventures

Joint ventures are very similar to general partnerships. Historically, joint ventures were employed to get around a law that prevented corporations from forming a partnership. This law gradually was phased out in all states over the last half of the 20th century. Still, the partnership and joint venture maintain subtle differences.

Like a general partnership, a joint venture (JV) is a contractual agreement by two or more persons to form a new business enterprise and to share in its management responsibilities and its profits and losses. While the two entities share many of the same properties, they also have significant differences. A partnership is a legal business enterprise most often with an indefinite life span; a joint venture is typically a single defined project with a limited scope and duration. A partnership generally involves two or more individuals; a joint venture usually involves two or more business entities.

Joint venture agreements typically do not establish a new busine