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When you hear the terms “joint venture” and “partnership,” they might initially sound quite similar. Digging deeper into what each of them are, you’ll quickly realize they’ve got many differences. When you deal in the business world, you’ll need to understand those differences. The following are four to get you started.

The People or Entities Involved

When it comes to a partnership, there are typically only people involved. Many partnerships have just two people, but there are plenty that have more than two. These people get together to form an association with the intent to open and operate a business.

Joint ventures are different in that entities can be one or more of the parties involved. People can be a party as well, but it is not limited to just individuals. You can find joint ventures that include government entities, businesses and corporations.

The Reason for the Venture or Partnership

The reason people join a partnership is to run a business and make a profit. The end-goal is wealth for both the partners and the company.

The reason people and entities join a joint venture is not always for the purpose of making a profit, though that could be one goal. Often times there is another specific goal in mind. For example, an agricultural university might enter a joint venture with a farming company to come up with an organic fertilizer that improves farming production.

The Legalities to Create the Venture or Partnership

When you enter into a partnership, you and your partners will come up with a partnership agreement that lays out the terms of everything involved. It will discuss profits, losses, percentage of control, processes of leaving the partnership and other similar issues.

When you enter into a joint venture, an agreement may not exist. If it does, it will generally be straightforward and address the specifics of the reason for joining together. It may list an end-date, or it may just state that it’s a temporary agreement.

The Accountability

When entering into a partnership, you have less accountability when the other partner does something wrong. Your agreement is long-term, but you don’t have to hold the blame for something your partner messes up on.

When entering a joint venture, you have more accountability if one of the parties commits a crime or does something else incorrectly. This makes a joint venture a bit riskier than a partnership.

Getting Started With a Lawyer

Whether you’re considering a partnership or a joint venture, you need to have someone on your side who can protect your interests. Contact a business lawyer, such as from Brown Kiely, LLP, to get started.