General partnerships and joint ventures are business entities involving at least two people as co-owners. The key difference between a general partnership and a joint venture is that a joint venture is formed only for a specific purpose or for a limited period of time. Once the business accomplishes its purpose, or the time expires, the joint venture dissolves. As with sole proprietorships, owners in general partnerships and joint ventures report taxes on their personal income tax returns. Generally speaking, both general partnerships and joint ventures are relatively simple to organize and operate. Ideally, a partnership will operate under a written partnership agreement. However, partnerships can be implied among co-owners even without a written agreement between them.
General partnerships and joint ventures also have their unique set of disadvantages. First and foremost, owners have unlimited personal liability, so creditors can attack their personal assets to recover business debts. Also, complications can arise because each owner has authority to bind the partnership, even without consent of the other owners. Lastly, because these entities are relatively informal, dissolution sometimes occurs unintentionally, so they do not have the lasting power of corporations.
