A joint venture (JV) is where two or more businesses team up to pursue a common project or opportunity while remaining separate organisations. In England and Wales there is no single "joint venture" legal form, instead, you choose a structure to suit the project's scale, duration and risk. Here are the main types and how they differ.
1. Contractual (unincorporated) joint venture
The simplest form: the parties simply enter a contract (a joint venture or collaboration agreement) setting out what each will do, how costs and profits are shared, and how decisions are made, without creating a separate company.
- Pros: quick, flexible, private, and easy to wind down, good for short-term or single projects (e.g. a joint bid or one development).
- Cons: no separate legal entity, so the parties contract and hold assets directly; liability is governed by the contract and general law, and a poorly drafted agreement can expose a party to the other's actions.
Watch out: if the arrangement amounts to "carrying on a business in common with a view to profit", it could be treated as a partnership under the Partnership Act 1890 (with unlimited joint liability) even if you did not intend that. Drafting should make the intended status clear.
2. Corporate joint venture (JV company)
The parties set up a new private limited company (under the Companies Act 2006), each taking shares, to run the venture.
- Pros: limited liability, a clear separate legal entity to own assets and contracts, and a familiar structure for longer-term ventures and outside investment. Governance is set out in the articles and a shareholders' agreement (board seats, reserved matters, deadlock, exit).
- Cons: more cost and admin (incorporation, accounts, filings), and profits are subject to corporation tax.
This is the most common structure for substantial, ongoing joint ventures.
3. Limited Liability Partnership (LLP) joint venture
An LLP (under the Limited Liability Partnerships Act 2000) combines limited liability and a separate legal personality with the flexibility of a partnership and tax transparency (members are taxed individually rather than the entity paying corporation tax).
- Pros: flexible profit-sharing and governance; limited liability; tax transparency that can suit professional or property ventures.
- Cons: must register at Companies House and file accounts publicly; less familiar to some investors than a company.
4. Partnership joint venture
The parties run the venture as a general partnership under the Partnership Act 1890.
- Pros: simple and private, with flexible profit-sharing.
- Cons: unlimited, joint liability, generally unattractive for anything other than low-risk ventures, which is why the LLP or company is usually preferred.
How to choose
Consider:
- Duration, a one-off project may suit a contractual JV; an ongoing business suits a company or LLP.
- Liability, for anything with real risk, prefer limited-liability structures (company or LLP).
- Tax, companies pay corporation tax; LLPs/partnerships are tax-transparent.
- Control and exit, a shareholders' (or members') agreement is essential to set decision-making, deadlock and how a party can leave.
- Investment and credibility, a company is the most familiar vehicle for outside investment.
Whatever the form, a clear written agreement dealing with contributions, control, IP ownership, profit-sharing, confidentiality, non-compete and exit is the single most important protection.
Key takeaways
- The main JV structures are contractual (unincorporated), corporate (JV company), LLP, and general partnership.
- Contractual JVs suit short-term projects but risk being treated as a partnership if not carefully drafted.
- Company and LLP structures give limited liability and suit longer-term ventures; companies pay corporation tax, LLPs are tax-transparent.
- A robust JV/shareholders' agreement (contributions, control, IP, deadlock, exit) is essential whatever the form.
Sources
- Partnership Act 1890 (general partnerships); Limited Liability Partnerships Act 2000 (LLPs)
- Companies Act 2006 (joint venture companies; articles and shareholder arrangements)
- General contract law (contractual/unincorporated joint ventures)
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.