JV Structures: Integrated, Divided, and Separate-Entity
# JV Structures: Integrated, Divided, and Separate-Entity
There is no single "joint venture." How you structure it decides **who does what, who gets paid how, and who carries which risk.** Three big choices:
## 1. Integrated (true) JV
The partners pool everything and share the **whole project's** profit or loss by an agreed percentage (say 60/40). Crews, costs, and revenue are combined. Best when the work can't be cleanly split and the partners truly operate as one team.
## 2. Divided (item / line-item) JV
Each partner takes responsibility for **specific scopes** of the work and keeps the profit (or eats the loss) on their own portion. The partners still jointly sign the prime contract, but internally the work is carved up. Best when scopes are separable (e.g., one partner does sitework, the other does the building).
## 3. Separate legal entity vs. purely contractual
- **Contractual JV:** the two companies sign a JV agreement and jointly sign the owner's contract — no new company is formed.
- **Separate entity (often an LLC):** the partners form a **new company just for this project**, which signs the owner's contract. This can cleanly separate the project's liability and finances. Common on large jobs.
## How to choose
Decisions usually come down to:
- Can the scope be split cleanly? → leans **divided**.
- Do we need a clean liability firewall and simple accounting? → leans **separate entity**.
- Is this a one-off, fully shared effort? → leans **integrated contractual**.
Your attorney and CPA should weigh in — the structure drives **taxes, liability, and bonding** as much as it drives day-to-day operations.
**Takeaway:** Pick the structure (integrated, divided, or separate entity) deliberately — it decides who carries which risk.
