Tyas & Company
Chartered Accountants, Registered Auditors, Tax, Business Advisors
Friday, 08 November 2019 00:01

What is a joint venture?

A joint venture is a commercial enterprise undertaken by two or more parties who otherwise retain their separate identities. The parties to the joint venture usually bring together different resources and areas of expertise to help fulfil a specific project or business activity.

HMRC’s manuals make the point that on close examination many of these associations prove to be partnerships, despite the name applied to them. The manuals state that a joint venture, which is not a partnership, is most likely to be found where parties already carrying on businesses of their own agree to co-operate in a single project, but they do not agree to share net profits or losses. Where they do agree to share net profits or losses, it is likely that a partnership will result even where the parties are already engaged in their own businesses.

For a partnership to exist, there must be a business and that business must be a business that is separate and distinct from any other business that the joint venture parties may conduct on their own account.

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Stephen Tyas                             Stephen Ayres

 

 

Registered to carry on audit work in the UK as GBJ
Limited Liability Partnership by the Institute of
Chartered Accountants in England and Wales

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