A Joint Venture, or JV, is an arrangement or partnership between two or more entities in which they pool their resources to accomplish a specific task. This may be a new project or another type of business activity. In a joint venture, each participant is responsible for the associated profits and costs, however the venture itself is its own entity, separate from the other existing businesses. The purpose of a joint venture is to take advantage of the resources of multiple companies at once in order to realize greater total gains through leveraged resources and minimize costs through economies of scale. A joint venture also allows multiple companies to make use of the skills and specializations of each party. For tax purposes, a joint venture will often involve the establishment of a new corporate entity. The IRS does not recognize joint ventures on their own, so creating another entity for the venture, such as an LLC, allows the entity to be taxed as normal. The distribution of taxes, expenses and profits are spelled out in a joint venture agreement, a written document detailing the terms of the venture. Some of the considerations when forming a joint venture are: An example of a successful joint venture is when Google and NASA teamed up to develop Google Earth.The Purpose of a Joint Venture
How Are Joint Ventures Taxed?
Before You Form a Joint Venture
Joint Venture (JV) FAQs
JV is an acronym for Joint Venture.
A Joint Venture, or JV, is an arrangement or partnership between two or more entities in which they pool their resources to accomplish a specific task.
The purpose of a joint venture is to take advantage of the resources of multiple companies at once in order to realize greater total gains through leveraged resources and minimize costs through economies of scale.
The IRS does not recognize joint ventures on their own, so creating another entity for the venture, such as an LLC, allows the entity to be taxed as normal.
An example of a successful joint venture would be when Google and NASA teamed up to develop Google Earth.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
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