A contractual agreement which aims at joining together two or more than two parties with an intended aim to execute a specific business undertaking is known as a joint venture. All the involved parties agree to share the loss and profit of the firm. It is also regarded as a connotation amongst two or more individuals for the purpose of execution of a single business firm for profit wherein the money, property, skill, efforts and knowledge are combined.
The respective parties needn’t contribute equally but each co-adventurer who promotes the firm must provide some contribution. It is not by the operation of law which creates a joint venture. A confidential or a fiduciary relationship is established with the existence of a joint venture. But, according to the circumstances, the fact of each case would decide the existence of a joint venture (Cooper and Ross 2009). Joint ventures have some key elements which are as follows:
· Right of control or joint control
· In the performance of a common purpose a community of interest
· Sharing rights in profits and loss.
· In the subject matter of the existence of a joint proprietary interest.
A partnership on the other hand is defined as a relationship amongst two or more individuals who as co-owners of a single business firm execute functions so as to earn profit. Usually, amongst partnership and ventures there is no essential difference and thus there are times where a joint venture is regarded as a kind of partnership.