Joint Venture

A joint venture is a type of business enterprise organized for a specific project or other time-limited objective.

Joint venturers combine their efforts, property, money, skill, or knowledge for joint profit. The joint venturers can be any combination of individuals or other business entities.

The joint venture terminates (if not terminated earlier) once the project is completed or the objective accomplished.

The traditional legal definition of joint venture means an unincorporated enterprise. A traditional joint venture is treated as a Partnership for federal tax purposes.

However, sometimes businesses that combine their efforts actually create a corporation, Limited Liability Company (LLC), or other Business Entity but they use the term “joint venture” to describe the business relationship. Hence, the words “joint venture” don't necessarily convey what type of entity you're dealing with.

One-owner or husband-and-wife businesses ordinarily would not have a reason to use a joint venture.

Caution: don't confuse a joint venture with the misleadingly named, Qualified Joint Venture, a husband-and-wife-only partnership specifically created by the tax code in the name of simplicity.