A joint venture is a relationship between two parties who team up to pursue specific goals by contributing their share of funding and services. Such strategic alliance focuses on a single project of limited duration. Profit-making may not be its primary objective. Many joint ventures are formed to accomplish a specific goal, for example, undertake a large-scale real estate development project, serve as a business incubator, develop a new drug, or restore a historical building. In the government contracting space, joint ventures allow certain businesses to compete together for government contracts reserved for small businesses. Through a joint venture, the parties can leverage their core strengths and carry out projects they wouldn’t be able to tackle if either entity acted alone.
A partnership, on the other hand, is formed to run a long-term business, and profit-making is its primary purpose. Partners have a fiduciary relationship with each other and must handle their affairs with the best interests of partners and the business in mind. The most common types of partnerships are general partnerships (GP), limited partnerships (LP), and limited liability partnerships (LLP).
