Is a Joint Venture a Partnership?

Written by Ricky Nave in Business Entities & Structures

Two business men walk together through the city as the discuss a joint venture of their companies

A joint venture (JV) is a collaboration between two companies or organizations for a specific purpose. Examples of joint ventures are:

  • Company A (a US company) wants to sell their product in China so Company A forms a joint venture with Company B (a Chinese company).
  • Companies A and B (both oil refineries in Texas) form a joint venture to construct an oil pipeline to distribute the output of both companies across America.
  • Two automobile companies form a joint venture to develop a more efficient fuel cell technology which both companies will be able to use and benefit from.

There is no specific legal meaning of the term “joint venture”. That means a joint venture can technically be anything, from a simple contract to an LLC to any other type of formal arrangement. However, the term joint venture is most often used to refer to collaborations formalized through an LLC or other partnership.

In other words, joint venture typically means a multi-member LLC or other partnership business entity which is co-owned by two or more organizations collaborating to develop a new technology or bring an existing product to a new market.

Ricky Nave

In college, Ricky studied physics & math, won a prestigious research competition hosted by Oak Ridge National Laboratory, started several small businesses including an energy chewing gum business and a computer repair business, and graduated with a thesis in algebraic topology. After graduating, Ricky attended grad school at Duke University in the mathematics PhD program where he worked on quantum algorithms & non-Euclidean geometry models for flexible proteins. He also worked in cybersecurity at Los Alamos during this time before eventually dropping out of grad school to join a startup working on formal semantic modeling for legal documents. Finally, he left that startup to start his own in the finance & crypto space. Now, he helps entrepreneurs pay less capital gains tax.

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