What is a joint venture characterized by?

A joint venture is characterized by being a temporary form of business arrangement where two or more parties collaborate to achieve a specific goal, such as a project or business endeavor. This collaboration allows each party to contribute resources, expertise, or capital while sharing the risks and rewards associated with the venture. Unlike a permanent business arrangement, which often involves a longer-term commitment or ongoing business relationship, a joint venture is typically formed for a limited time frame or until the specific project is completed.

The nature of joint ventures allows for flexibility, as they can be dissolved once goals are met, making them distinct from permanent partnerships or single ownership structures. This temporary characteristic is essential, as it enables businesses to work together without the complications of a lasting partnership, which may involve more significant legal and operational commitments.