Also known as: joint venture · joint venturer · joint venturers · JV
Written by attorneys · grounded in primary & secondary sources — see below
A business arrangement recognized under the Model Business Corporation Act as an entity in which a corporation may serve as promoter, partner, member, associate, or manager and for which the corporation may purchase insurance covering a director or officer serving at its request.
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Jung BioTech's board authorizes its president to sign documents creating a new research entity with Jordan Dynamics. The president lists Jung BioTech as a participant in the entity formation papers. The corporation later relies on that participation to claim authority over project decisions.
Jackson Mutual's CEO agrees to serve as an officer of a joint venture formed with Jaffe Securities. The corporation purchases a policy covering the CEO for claims arising from that service. When a lawsuit names the CEO in his venture capacity, the policy responds to defense costs.
Jacqueline Juarez and Jason Jung form a joint venture to develop a single commercial building. Juarez locates an adjacent parcel and takes title in her own name without informing Jung. Jung sues claiming breach of the duty of loyalty arising from their venture relationship.
Jeffrey Jha acquires shares in a target while participating in a joint venture with another bidder. The venture agreement requires disclosure of any side arrangements. Jha fails to report the venture in his Schedule 13D filing.
Hanson Trust PLC and an affiliate enter a joint venture to acquire SCM Corp. shares. The venture document includes put and call options on the acquired stock. SCM challenges the arrangement as an undisclosed understanding requiring disclosure.
Hobby Lobby Stores, Inc. forms a joint venture with another entity to operate certain retail locations. The venture agreement allows the corporation to advance its religious values through the new entity's operations. The arrangement is later cited to support a claim for religious exemptions.
A joint venture is typically formed for a single project or limited purpose, while a partnership usually contemplates ongoing business. Courts apply similar fiduciary standards to both, but the scope of duties may be narrower in a joint venture because of its limited duration and objective.
Supporting sources
Yes. Model Business Corporation Act section 3.02(i) expressly authorizes a corporation to act as a promoter, partner, member, associate, or manager of a joint venture. The corporation may therefore enter formation documents and exercise powers on behalf of the venture.
…here and there through opinions dealing with other circumstance, be thought applicable? In other words, the mere fact that the joint venturers rent property together does not call for the strict rule that applies to general partners. Many things may excuse what is there forbidden. Nor here does any possibility of renewal exist as…
…are incorporated) allows for-profit corporations to “perpetuat[e] religious values.” [^maj-24]: See, e.g., M. Sanders, Joint Ventures Involving Tax-Exempt Organizations 555 (4th ed. 2013) (describing Google.org, which “advance[s] its charitable goals” while operating as a for-profit corporation to be able to “invest in…
…with any person with respect to any securities of the issuer, including but not limited to transfer of any of the securities, joint ventures
…with any person with respect to any securities of the issuer, including but not limited to transfer of any of the securities, joint ventures
…available for the redress of wrong. The plaintiff said to his employer: “I can treat this transaction either as a loan or as a joint venture
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Model Business Corporation Act section 8.57 permits a corporation to purchase insurance covering a director or officer who serves at the corporation's request as an officer of a joint venture. Coverage extends to liability arising from that service regardless of the corporation's power to indemnify directly.
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Joint venture interests may be subject to securities regulation when they involve investment of money in a common enterprise with expectation of profits derived from the efforts of others. The casebook materials note that securities rules can apply to such interests.
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Participants owe each other duties of loyalty and disclosure analogous to those in partnerships. In Meinhard v. Salmon the court imposed a duty on one venturer to offer a related opportunity to the other before taking it personally.
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