Joint Venture

What Is a Joint Venture? A joint venture (JV) is a strategic business arrangement where two or more parties combine their resources, expertise, and efforts to accomplish a specific project or business activity while maintaining their separate identities. Unlike a partnership, which implies an ongoing relationship, a joint venture is typically formed for a defined purpose and limited duration. ## Key Characteristics - Shared control and management of the venture - Contribution of resources (capital, property, expertise, or labor) by each party - Shared profits and losses according to the agreed ratio - Each party maintains its separate legal identity - Fiduciary duties between the joint venturers ## Legal Considerations Joint ventures create mutual fiduciary obligations between the parties. Each venturer may be held jointly and severally liable for the obligations of the venture. A well-drafted joint venture agreement should clearly define each party's contributions, the scope of the venture, governance structure, profit-sharing formula, intellectual property rights, exit mechanisms, and dispute resolution procedures. Tax implications vary based on the venture's structure and jurisdiction.