What type of business arrangement is defined as a joint venture?

A joint venture is defined as an arrangement where two or more parties come together to create a new, separate legal entity. This distinct entity is formed specifically for pursuing a project or business activity, allowing the participating parties to combine resources, share risks, and leverage each other’s strengths. Each party contributes to the joint venture in various ways, such as capital, expertise, or technology, and they jointly manage the operations while sharing the risks and rewards of the venture.

In this context, the other choices describe different types of business arrangements that do not match the joint venture definition. Full ownership pertains to sole proprietorships or wholly-owned subsidiaries, while a partnership without profit-sharing does not reflect the mutual benefits and collaborative nature that characterize a joint venture. Licensing technology typically involves one party allowing another to use its intellectual property without forming a new entity, which differs significantly from the collaborative investment in a joint venture framework. Thus, the essence of a joint venture lies in the partnership and creation of a shared entity.