A joint venture is a legal business arrangement where two or more individuals or entities come together to accomplish a specific task. The task may be to undertake a common business. Each of the entities will be responsible for the profits and costs associated with the business undertaking.
Being only a business arrangement, the joint venture is definitely not a legal entity in that it cannot contract in its own name, neither can it own property. It does not take the form of a corporation or partnership. It can only conduct the business it was formed to undertake.
Examples of joint ventures include two firms agreeing to advertise under the same booth in a trade convention or two corporations coming together to invent microchips. The identifiable factors of a joint venture are the coming together of two or more parties for a common objective.
This form of business is attractive since it allows parties to share in the risk and return of a business.