9/23/2023 0 Comments Joint venture vs partnershipHowever, even if an original entity is set up as an LLC or a corporation, it can still be a good idea to organize the joint venture as an LLC or a corporation. Any original business entity that is an LLC already has limited liability for its members, while any original entity that is a corporation already has limited liability for its shareholders. This is especially important if any of the original business entities are organized as a sole proprietorship or as some form of partnership that does not give all partners limited liability. If this option is chosen, appropriate representatives of ABC and XYZ sign a contract outlining the nature and goals of the joint venture, the contributions to be made by each entity, how the entities will share in the profits or losses, how the project will be managed, and other details.Ī joint venture that is organized as a separate entity is almost always organized as either a corporation or an LLC due to the limited personal liability offered for the owners. This is commonly called a joint venture agreement or joint venture contract.
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