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 Kentucky, a joint venture is a cooperative enterprise entered into by two or more business entities or individuals for the purpose of executing a particular project or business activity. Joint ventures can be structured in various forms, including partnerships, limited liability companies (LLCs), or corporations, depending on the needs of the project and the parties involved. Each structure comes with its own set of regulatory and tax implications. For instance, an LLC formed for a joint venture in Kentucky is subject to the Kentucky Revised Statutes (KRS) Chapter 275, which governs LLCs, including aspects like formation, management, and dissolution. Tax issues are also a critical consideration, as the entity type will determine the federal and state tax obligations. Liability is another important aspect; parties to a joint venture can be held jointly and severally liable for the obligations of the venture, depending on the structure chosen and the agreement terms. Lastly, participants in a joint venture have fiduciary duties to one another, which require them to act in the best interests of the joint venture. It is advisable for parties considering a joint venture to consult with an attorney to understand the full spectrum of legal implications, including drafting a joint venture agreement that clearly outlines the rights, responsibilities, and expectations of each party.