What type of entity is typically formed for a joint project?

A joint venture is a type of business entity specifically established for a collaborative project between two or more parties. In this arrangement, the involved entities come together to share resources, expertise, and risks associated with a particular project while often maintaining their individual identities and operations.

This structure is advantageous for projects that require specific sets of skills, finances, or technology that the parties can pool together, maximizing efficiency and productivity. Joint ventures are particularly beneficial in industries such as construction, where collaborative projects are common and each partner may contribute unique strengths.

In contrast, a corporation, limited liability company, or sole proprietorship tends to be more focused on continuous operations rather than temporary or project-specific collaboration. These forms are typically geared towards ongoing business activities rather than singular projects that define the joint venture approach.