If you are considering going into business with someone, you may be reviewing your options for the business structure. Joint ventures and partnerships share a number of similarities, though there are several significant differences that can have tax and other implications.

The U.S. Small Business Administration notes that a joint venture is a type of partnership, but it typically is structured for a single project, transaction or other limited period of time. Such a structure is often characterized as a project on which the entities have either an expressed or implied agreement, shared profits and losses and equal voices.

Based on that definition, a key difference between partnerships and joint ventures is that a partnership is structured to last for an indefinite timeframe. It is important to distinguish how a project is structured, because the government will tax it accordingly. With a partnership, taxes are considered “pass through,” as the partners as individuals pay taxes, not the business. A joint venture, however, could be taxed as either a corporation or as a partnership.

One last important distinction is liability. In a partnership, the individuals involved are typically jointly and severally liable should an incident arise. A joint venture could be structured as a limited liability corporation or as a separate corporation. In doing so, the parties involved would only be held liable for their own investments.

These differences may seem subtle, but they are important considerations for anyone launching a business with a partner. While this information may be useful, it should not be taken as legal advice.