Difference Between: Partnership vs Joint Venture

Similarities: Joint Control

“We turn next to the element of joint control. ‘An essential element of a partnership or joint venture is the right of joint participation in the management and control of the business. [Citation.] Absent such right, the mere fact that one party is to receive benefits in consideration of services rendered or for capital contribution does not, as a matter of law, make him a partner or joint venturer.” Simmons v. Ware (2013)213 Cal.App.4th 1035, 1056.

Difference: Distinction between partnership and Joint Venture

“The distinction between joint ventures and partnerships is not sharply drawn. A joint venture usually involves a single business transaction, whereas a

partnership may involve ‘a continuing business for an indefinite or fixed period of time.’ Yet a joint venture may be of longer duration and greater complexity than a partnership. From a legal standpoint, both relationships are virtually the same. Accordingly, the courts freely apply partnership law to joint ventures when appropriate.” Weiner v. Fleischman (1991) 54 Cal.3d 476, 482.

Partnership Definition

“Partnership means an association of two or more persons to carry on as coowners a business for profit formed under Section 16202, predecessor law, or comparable law of another jurisdiction, and includes, for all purposes of the laws of this state, a registered limited liability partnership, and excludes any partnership formed under Chapter 2 (commencing with Section 15501), Chapter 3 (commencing with Section 15611), or Chapter 5.5 (commencing with Section 15900).” California Corporation Code Section 16101.

“Under traditional legal concepts the partnership is regarded as an aggregate of individuals with each partner acting as agent for all other partners in the

transaction of partnership business, and the agents of the partnership acting as agents for all of the partners.” (Marshall v. International Longshoremen’s and Warehousemen’s Union (1962) 57 Cal.2d 781, 783.

Joint Venture Definition

In California, “[a] joint venture is ‘an undertaking by two or more persons jointly to carry out a single business enterprise for profit.’” Weiner v. Fleischman (1991) 54 Cal.3d 476, 482. “A joint venture has been defined in various ways, but most frequently perhaps as an association of two or more persons who combine their property, skill or knowledge to carry out a single business enterprise for profit.” Holtz v. United Plumbing and Heating Co. (1957) 49 Cal.2d 501, 506.

Each of the members of a joint venture, and the joint venture itself, are responsible for the wrongful conduct of a member acting in furtherance of the venture.

…A joint venture exists if all of the following have been proved:

Two or more persons or business entities combine their property, skill, or knowledge with the intent to carry out a single business undertaking;

Each has an ownership interest in the business;

They have joint control over the business, even if they agree to delegate control; and

They agree to share the profits and losses of the business.

A joint venture can be formed by a written or an oral agreement or by an agreement implied by the parties’ conduct.

California Jury Instruction CACI 3712, the jury is instructed as follows:

A joint venture is ‘an undertaking by two or more persons jointly to carry out a single business enterprise for profit.’ ” (Weiner v. Fleischman (1991) 54 Cal.3d 476, 482.

“A joint venture has been defined in various ways, but most frequently perhaps as an association of two or more persons who combine their property, skill or knowledge to carry out a single business enterprise for profit.” (Holtz v. United Plumbing and Heating Co. (1957) 49 Cal.2d 501, 506.

Liability for Obligations

“The incidents of a joint venture are in all important respects the same as those of a partnership. One such incident of partnership is that all partners are jointly and severally liable for partnership obligations, irrespective of their individual partnership interests. Because joint and several liability arises from the partnership or joint venture, Civil Code section 1431.2 [Proposition 51] is not applicable.” Myrick v. Mastagni (2010) 185 Cal.App.4th 1082, 1091.

“[T]he partners of a partnership are jointly and severally liable for the conduct and torts injuring a third party committed by one of the partners.” (Black v.

Sullivan (1975) 48 Cal.App.3d 557, 569.

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