What type of business arrangement is formed between two or more businesses for a specific project?

A joint venture is a specific type of business arrangement where two or more businesses come together to collaborate on a particular project, sharing resources, risks, and rewards. This collaborative partnership is typically formed for a defined time period and for a specific purpose, such as developing a new product or entering a new market. Each participant usually maintains its independence while working together towards a common goal.

This arrangement is particularly useful when businesses want to pool their expertise, capital, or technology without undergoing a complete merger or acquisition. The joint venture agreement outlines the contributions, responsibilities, and profit-sharing arrangements for each party involved. Because the focus is on a temporary partnership for a distinct project, a joint venture is a flexible and efficient way to leverage the strengths of multiple companies while minimizing individual risk.