A joint venture is a business arrangement in which two or more persons or entities agree to jointly pursue a specific business objective—often more limited in scope and duration than a typical business or company. A joint venture may be organized as its own corporation or limited liability company. In addition to the risks of the business venture, a person or entity considering a joint venture should understand the tax issues, liability issues, and fiduciary duty issues involved.

In Colorado, a joint venture is a collaborative business arrangement where two or more parties combine resources to achieve a specific goal, which is usually more limited in scope and time than a regular business operation. Parties can organize a joint venture as a separate legal entity, such as a corporation or a limited liability company (LLC), which requires compliance with state statutes governing the formation and operation of these entities. When entering a joint venture, it is crucial to understand the associated tax implications, which can vary depending on the structure chosen. Additionally, each party in a joint venture may be subject to joint and several liabilities for the obligations of the venture, unless the joint venture is formed as an LLC or corporation, which generally offers limited liability protection to its members or shareholders. Lastly, parties to a joint venture owe fiduciary duties to one another, which requires them to act in the best interest of the joint venture. It is advisable for parties to draft a joint venture agreement that clearly outlines the roles, responsibilities, and expectations of each party to minimize disputes and clarify the terms of the relationship.