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Joint Venture

The kinds of partnership just described all share the intention of being ongoing businesses. A joint venture differs from these in that it is a partnership set up for a specific purpose of limited duration. For example, suppose you and a friend decided to buy, renovate, and resell a house together. Your joint venture would start when you purchased the house and end when you sold it.

As for your taxes, joint ventures are taxed the same as partnerships. During the life of such a joint venture, each partner is subject to unlimited liability, so the same caution should be exercised in selecting a joint venture partner as in selecting any other partner. Similarly, you can avoid many problems by consulting an attorney and putting the terms of your joint venture agreement in writing.