An association of two or more individuals or companies engaged in a solitary business enterprise for profit without actual partnership or incorporation; also called a joint adventure.
A joint venture is a contractual business undertaking between two or more parties. It is similar to a business partnership, with one key difference: a partnership generally involves an ongoing, long-term business relationship, whereas a joint venture is based on a single business transaction. Individuals or companies choose to enter joint ventures in order to share strengths, minimize risks, and increase competitive advantages in the marketplace. Joint ventures can be distinct business units (a new business entity may be created for the joint venture) or collaborations between businesses. In a collaboration, for example, a high-technology firm may contract with a manufacturer to bring its idea for a product to market; the former provides the know-how, the latter the means.
All joint ventures are initiated by the parties' entering a contract or an agreement that specifies their mutual responsibilities and goals. The contract is crucial for avoiding trouble later; the parties must be specific about the intent of their joint venture as well as aware of its limitations. All joint ventures also involve certain rights and duties. The parties have a mutual right to control the enterprise, a right to share in the profits, and a duty to share in any losses incurred. Each joint venturer has a fiduciary responsibility, owes a standard of care to the other members, and has the duty to act in Good Faith in matters that concern the common interest or the enterprise. A fiduciary responsibility is a duty to act for someone else's benefit while subordinating one's personal interests to those of the other person. A joint venture can terminate at a time specified in the contract, upon the accomplishment of its purpose, upon the death of an active member, or if a court decides that serious disagreements between the members make its continuation impractical.
Joint ventures have existed for centuries. In the United States, their use began with the railroads in the late 1800s. Throughout the middle part of the twentieth century they were common in the manufacturing sector. By the late 1980s, joint ventures increasingly appeared in the service industries as businesses looked for new, competitive strategies. This expansion of joint ventures was particularly interesting to regulators and lawmakers.
The chief concern with joint ventures is that they can restrict competition, especially when they are formed by businesses that are otherwise competitors or potential competitors. Another concern is that joint ventures can reduce the entry of others into a given market. Regulators in the Justice Department and the Federal Trade Commission routinely evaluate joint ventures for violations of Antitrust Law; in addition, injured private parties may bring antitrust suits.

The Advantages of Joint Ventures

Properly chosen and implemented, joint ventures can be a great way for your small business to get in on opportunities (and profits) that otherwise you would miss out on. I like to think of them as diamonds on the beach. You see the diamonds lying on the sand but try as you might, you can't pick them up – until you team with someone else who knows the trick of scooping them up.

By teaming up with other people or businesses in a joint venture, you can:

• extend your marketing reach
• access needed information and resources
• build credibility with a particular target market
• access new markets that would be inaccessible without the partner

For instance, suppose you and five other potters form a joint venture to hold a Potter's Fair on a particular date. Because you pool your resources, you're able to do much more advertising and promotion than you would be able to go alone, bringing out crowds of customers for your joint event.

Joint Venture Definition
A joint venture is a strategic alliance where two or more people or companies agree to contribute goods, services and/or capital to a common commercial enterprise.
Sounds like a partnership, doesn’t it? But legally, joint ventures and partnerships are not the same thing.

Joint Ventures versus Partnerships
The main difference between a joint venture and a partnership is that the members of a joint venture have teamed together for a particular purpose or project, while the members of a partnership have joined together to run "a business in common".
Each member of the joint venture retains ownership of his or her property.
And each member of the joint venture shares only the expenses of the particular project or venture.
Tax-wise, there are also differences between joint ventures and partnerships. As a member of a joint venture, you will receive a share of the profits which will be taxed according to whatever business structure you have set up. So, for instance, if you operate a sole proprietorship, your joint venture profits will be taxed just as any other business income would.
Joint ventures enjoy tax advantages over partnerships, too. Capital Cost Allowance (CCA) is treated differently. While those in partnerships have to claim CCA according to partnership rules, those in joint ventures can choose to use as much or little of their CCA claim as they like.
And joint ventures don’t have to file information returns, unlike partnerships.

How to Get a Joint Venture Started

• The first step to creating a joint venture is to set your goals and decide what you want your joint venture to do. If you need help getting started with this, look at the four things a joint venture can do that I've listed at the beginning of this article, pick one, and then develop a goal that is as specific as possible.

• Then it's time to look for the like-minded - people or firms that might be interested in the same goal or goals you want to pursue. Look in the business groups you already belong to, both in person and virtually. Use your social networking connections. Study business listings in the phone book or on Web sites to find those that might share your goals.

• And be open to being asked. Once you start talking to other people about what you might do together, a joint venture idea you haven’t even thought of might pop up - one with a lot of potential.

• Once you've found the people to share in a joint venture, be sure to have it all put into writing in a joint venture agreement. I strongly recommend hiring a legal professional to do this.

So instead of dismissing an opportunity as out of your reach, start thinking instead about how you could participate with a joint venture. Properly planned and executed, joint ventures can help your small business go where it's never been able to go before.