A joint venture is a temporary form of business structure, normally used when two or more persons or parties combine efforts to complete one or more business transactions. No written agreements are required for the formation of a joint venture. Joint ventures are often used in real estate development as a means of raising capital and spreading risk. The rights, duties, and obligations are similar to those of partners in a general partnership except that they are restricted to the transaction or transactions for which the joint venture was formed. Once the purpose of the joint venture has been accomplished, the entity ceases to exist without need of formal dissolution proceedings.
In states where a joint venture is not viewed as an entity legally able to hold title to real property, those involved in the joint venture may acquire property in their names, individually, with or without reference being made to the joint venture. If the individuals of the joint venture are married, their spouses’ interests must also be accounted for. Upon subsequent conveyance or encumbrance of such property, those holding an interest in the property would be required to execute the requisite deed or mortgage in the manner in which they took title. In states which recognize joint ventures as holding the same powers as partnerships, such entities may acquire, convey, and encumber title to real property in the joint venture name, subject to applicable laws.