What defines a joint venture in business?

A joint venture is defined by the collaboration between two or more parties to achieve a specific business objective, typically for a limited time. This arrangement involves pooling resources, expertise, and efforts to undertake a particular project or set of related projects. The focus on a single objective distinguishes joint ventures from other types of business partnerships, which may not be limited in scope or time.

In a joint venture, each party maintains its separate identities and can share both the risks and rewards of the endeavor. The agreement usually articulates contributions from each participant, the management structure, and how profits or losses will be shared related to achieving the project's goals. This structure allows for flexibility and targeted collaboration rather than an indefinite or continuous operational focus associated with other types of partnerships.