What is a partnership or joint venture established for?

A partnership or joint venture is primarily established for a temporary project between two or more entities. This arrangement allows the parties involved to collaborate on a specific goal or project while maintaining their individual legal identities. It provides the flexibility of pooling resources, sharing expertise, and distributing risks associated with the venture without forming a permanent business entity.

This temporary nature distinguishes partnerships and joint ventures from other business structures, such as corporations or LLCs, which are often geared toward long-term operations. In the case of a partnership, while it can lead to ongoing business relationships, it is frequently entered into with the intent of achieving a specific project or initiative before dissolution.

The other options do not accurately describe the nature of partnerships or joint ventures. Instead of focusing on unlimited liability or tax avoidance, the essence of these arrangements is collaboration on defined projects, making the correct understanding of their purpose critical in business contexts.