Joint Venture vs. Partnership: What's the Difference?
Edited by Aimie Carlson || By Janet White || Published on November 18, 2023
A "Joint Venture" is a business arrangement between entities for a specific project, while a "Partnership" is a continuous business relationship where parties share profits, losses, and control.
Key Differences
A "Joint Venture" is typically a business collaboration between two or more parties to undertake a specific project or goal. This collaboration often has a limited duration or is project-specific. In contrast, a "Partnership" is a broader, more enduring business relationship in which parties agree to share responsibilities, profits, losses, and control over business operations.
While a "Joint Venture" can be formed between companies of varying sizes, including large corporations, to combine resources for a particular purpose, a "Partnership" is generally a legal structure chosen by individuals or entities to operate a business together with shared liabilities and benefits.
In terms of legal formalities, a "Joint Venture" might not always be a separate legal entity; it can operate based on a contract or agreement. On the other hand, a "Partnership" often requires a partnership agreement and may be subject to specific legal regulations depending on the jurisdiction.
The dissolution of a "Joint Venture" usually happens after the completion of a project or goal, or if the venture becomes unprofitable. A "Partnership" can continue indefinitely until partners decide to dissolve it or if it faces legal or financial challenges.
Comparison Chart
Purpose
Created for a specific project or goal.
Continuous business relationship with shared responsibilities and benefits.
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Duration
Often limited to the duration of a project.
Can be indefinite until dissolution by partners.
Legal Entity
Might not always be a separate legal entity.
Often recognized as a legal entity with shared liabilities.
Participation
Can involve entities of any size.
Typically involves individuals or small entities.
Dissolution
After project completion or if unprofitable.
By mutual agreement, legal or financial issues.
Joint Venture and Partnership Definitions
Joint Venture
Combines resources for mutual benefit.
The Joint Venture allowed the firms to pool their research expertise.
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Partnership
A continuous business relationship with shared profits and losses.
Lucy and Mike started a Partnership to open a new cafe.
Joint Venture
Typically concludes post project or goal completion.
After launching the product, the Joint Venture was dissolved.
Partnership
Can continue until partners choose dissolution.
After ten successful years, they decided to end their Partnership and pursue individual ventures.
Joint Venture
A collaboration often limited in duration or project-specific.
The two companies formed a Joint Venture to explore the new market.
Partnership
Involves shared control and responsibilities.
Their Partnership allowed both to have an equal say in business decisions.
Joint Venture
Might not be a separate legal entity.
The Joint Venture operated based on a detailed agreement between the parties.
Partnership
Parties have joint liabilities.
In the Partnership, both were liable for any business debts incurred.
Joint Venture
A business arrangement between entities for a specific goal.
TechCorp and BuildInc entered into a Joint Venture to develop smart buildings.
Partnership
Often requires a legal partnership agreement.
Before starting, they drafted a Partnership agreement detailing roles and expectations.
Partnership
The state of being a partner.
Partnership
A business entity in which two or more co-owners contribute resources, share in profits and losses, and are individually liable for the entity's actions.
Partnership
The persons participating in such a business entity.
Partnership
A relationship between individuals or groups that is characterized by mutual cooperation and responsibility, as for the achievement of a specified goal
Neighborhood groups formed a partnership to fight crime.
Partnership
The state of being associated with a partner.
Partnership
An association of two or more people to conduct a business
Forge a partnership
Partnership
(cricket) The period when two specific batsmen are batting, from the fall of one wicket until the fall of the next; the number of runs scored during this period,
Partnership
The state or condition of being a partner; as, to be in partnership with another; to have partnership in the fortunes of a family or a state.
Partnership
A division or sharing among partners; joint possession or interest.
Rome, that ne'er knew three lordly heads before,First fell by fatal partnership of power.
He does possession keep,And is too wise to hazard partnership.
Partnership
An alliance or association of persons for the prosecution of an undertaking or a business on joint account; a company; a firm; a house; as, to form a partnership.
Partnership
A contract between two or more competent persons for joining together their money, goods, labor, and skill, or any or all of them, under an understanding that there shall be a communion of profit between them, and for the purpose of carrying on a legal trade, business, or adventure.
Partnership
The members of a business venture created by contract
Partnership
A contract between two or more persons who agree to pool talent and money and share profits or losses
FAQs
How is a "Partnership" typically structured?
A "Partnership" is a continuous business relationship with shared responsibilities, profits, and losses.
Is a "Joint Venture" always a separate legal entity?
No, a "Joint Venture" might not always be a separate legal entity and can operate based on a contract.
What is the primary purpose of a "Joint Venture"?
A "Joint Venture" is formed for a specific project or goal.
Are partners in a "Partnership" liable for business debts?
Yes, in a "Partnership", partners typically have joint liabilities.
What legal documents are needed for a "Partnership"?
A "Partnership" often requires a legal partnership agreement.
Is a "Partnership" a type of corporation?
No, a "Partnership" is a distinct business structure separate from a corporation.
Can a "Partnership" involve more than two entities?
Yes, a "Partnership" can involve multiple individuals or entities.
When does a "Joint Venture" typically conclude?
A "Joint Venture" usually ends after the completion of its specific project or goal.
Can a "Joint Venture" be formed between large corporations?
Yes, a "Joint Venture" can involve entities of any size, including large corporations.
Can a "Joint Venture" involve competitors?
Yes, competitors can form a "Joint Venture" for mutual benefits, such as pooling resources.
Are "Joint Ventures" common in specific industries?
Yes, "Joint Ventures" are common in industries like real estate, technology, and energy.
What's a key advantage of a "Joint Venture"?
A "Joint Venture" allows parties to combine resources and expertise for a specific project.
Can a "Joint Venture" be international?
Yes, a "Joint Venture" can be formed between entities from different countries.
Who makes decisions in a "Partnership"?
Decision-making in a "Partnership" is shared, but the specifics depend on the partnership agreement.
Can partners in a "Partnership" have unequal shares?
Yes, partners in a "Partnership" can have unequal shares, as specified in the partnership agreement.
How long does a "Partnership" typically last?
A "Partnership" can continue indefinitely until partners choose to dissolve it.
Who bears the losses in a "Joint Venture"?
Losses in a "Joint Venture" are typically shared based on the agreement between parties.
Is profit sharing mandatory in a "Joint Venture"?
Profit sharing in a "Joint Venture" is based on the agreement between the involved parties.
How are disputes resolved in a "Partnership"?
Disputes in a "Partnership" are often resolved based on the terms of the partnership agreement or through mediation.
Can a "Partnership" be formed without a written agreement?
While possible, it's advisable to have a written agreement for clarity in a "Partnership".
About Author
Written by
Janet WhiteJanet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Aimie CarlsonAimie Carlson, holding a master's degree in English literature, is a fervent English language enthusiast. She lends her writing talents to Difference Wiki, a prominent website that specializes in comparisons, offering readers insightful analyses that both captivate and inform.
