A joint venture (JV) is a partnership formed by two or more persons or business entities (such as corporations or limited liability companies) for the purpose of completing a single project. JV partners share profits and losses and each partner has some control in how the project is accomplished.

Joint ventures benefit partners when each adds an important piece to the project puzzle. Before you invite someone to become a JV partner, consider if something of value is really being brought to the table that can’t be obtained by less expensive means such as outsourcing to third parties.

You should also consider the potential legal liabilities that can be incurred by the actions of your JV partners on behalf of the joint venture. This is particularly important if you are a partner as an individual (personal liability) instead of having your corporation or limited liability company serve as JV partner.

Weigh the business pros and cons (risk versus reward) and run the proposed JV by your lawyer before agreeing to form the venture.

About the Author

With an advanced international law degree from Georgetown University and more than 14 years of real world legal experience, Attorney Mike Young shows entrepreneurs how to protect and grow their businesses online. He's the author of Internet Marketing Legal Secrets Revealed. Not just a lawyer who focuses exclusively on Internet and marketing law, Mike’s been working with computers for more than 27 years (his first computer was an Atari 400 with 8 KiB RAM) and started representing Internet businesses back in 1996.