Joint venture

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A joint venture (JVs) is a kind of temporary partnership between to corporations to execute a particular business project and share the costs and benefits of only that project. Joint ventures have taxation advantages over other business unions like partnerships or even fully-fledged mergers and the members of the JV each retain ownership of their property.

JVs are contractual agreements between two or more companies[1] usually enter JVs because they require a potential partner to help extend a project's reach. Sole proprietors are taxed on their JV profit as regular business income and can claim as much Capital Cost Allowance (CCA) as they choose.[2] Unlike partnerships, JVs don't have to file information returns.

References

  1. Joint venture definition. InvestorWords.
  2. Joint Ventures: Diamonds on the Beach. About.com.