What is the difference between a joint venture and a limited liability company?

A joint venture and a limited liability company (LLC) are both business structures that involve two or more people working together. However, there are some key differences between the two. A joint venture is a temporary business arrangement where two or more people agree to contribute money, property, labor, or skill in an effort to accomplish a particular goal. Generally, the members of a joint venture are liable only for their individual contributions, and the venture is not responsible for any of the partners’ debts. In addition, a joint venture has a limited lifespan and can be dissolved at any time with all of the parties agreeing. In contrast, an LLC is a state-created business structure that combines elements of the traditional corporations and partnerships. LLCs are more permanent in nature and members of an LLC have limited liability for the debts and obligations of the business. This means that if the LLC is sued, the members’ personal assets remain separate and are not at risk. Additionally, members of an LLC are entitled to a share of the profits allocated to them in proportion to their ownership interests. In Washington, a joint venture must be formally documented with filings to the Secretary of State, while an LLC must submit Articles of Organization and an Operating Agreement. Furthermore, an LLC is subject to ongoing reporting and tax filing requirements. Overall, a joint venture and an LLC can both be beneficial to businesses, but they offer different levels of protection and have different formation and filing requirements.

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What is the difference between a joint venture and a limited liability company?

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