Partnerships and joint ventures may also be required to file separate information tax returns, make certain submissions to the California Department of State, file a fictitious business name in the counties where they operate, have a partnership license, even if one of the partners already has such a license. The U.S. Small Business Administration provides more information about joint venture agreements here. Compared to a corporation or Limitedied Liability Company (“LLC”), a general partnership or joint venture are the easiest business units to create and can be carried out very informally, although this has obvious drawbacks for partners in the event of future litigation. Unlike a partnership contract, a joint venture exists only until the deadline set out in the joint venture contract. Failure to act as a true agent may lead to liability for damages resulting from the breach of these obligations, including punitive damages! A joint venture is created to initiate a particular project or business transaction for the sole purpose of existing for a limited time. Once the transaction or project is completed, it is very likely that the joint venture will be dissolved. The Joint Undertaking may be motivated for financial or strategic reasons in order to collect resources, use common assets or share risks. A joint venture typically consists of two or more individuals or companies that partner to complete a project that is limited in volume and time. Once the project has been completed or on a fixed date in the future, the Joint Undertaking shall end. California law requires that a joint venture be virtually identical to a general trading company.
For example, neither group needs to register with the Secretary of State (SOS) or submit written documents in order to work legally. In addition, neither of the two company structures is generally subject to franchise tax or securities law. The main handicap of setting up a general trading company or joint venture is that they are both fully responsible for the owner`s personal property. A partnership consists of two or more people who do business together to achieve a common benefit. A partnership is governed by a partnership agreement and, unlike a joint venture, it usually exists for as long as the partners wish.