A Partnership is an association of two or more people to do business for profit according to a partnership agreement. Partnerships are more flexible in how you can tax gains and losses. In a partnership, you can decide to allocate profits and losses in any way.

Now, a partnership agreement can be orally or written, in other words, two people or more intending on or merely conducting a business together is grounds for forming a partnership. But it is highly recommended to form a partnership in writing, since it could address several key points, such as defining ownership, responsibilities, profit sharing and financial responsibilities, decision making process, dissolution, etc. 

To form a partnership orally, the most fundamental requirement is solely the verbal agreement between two or more people to conduct business and share profits as well as losses. According to the Revised Uniform Partnership Act of 1997 (RUPA), a partnership is formed based on business purposes and not based on a written contract. 

A Joint venture is usually more limited in flexibility, and memorializes a common purpose of a group or multiple companies. Members in a joint venture are limited in liability to their respective interests in the Joint Venture Entity, or JVE.

Depending on whether the joint venture is contractual or entity-based, the forming procedure could vary and that’s due to the fact that there isn’t a single statutory framework that applies to all cases.

In the case of a contractual joint venture, a written agreement is in fact necessary, even if not typically required by law. Under US law, this contract must include some key provisions, such as offer, acceptance, consideration, capital contribution, profit sharing and financial responsibilities, decision making structures, termination processes,… As a result of this agreement, if no entity has been formed, filing with the state is not required.

As for entity-based joint ventures, it could be formed as a general partnership or as a corporation or LLC. For the latter, it is necessary for parties to comply with applicable state statutes for entity formation. And when it comes to tax considerations and governance, tax ID (EIN) is required.