Cooperative joint ventures allow for more flexible agreements between the joint venture parties. Cooperative Joint Ventures have the choice to organize themselves either as a limited liability company or as a non-legal person in which the partners are subject to unlimited liability, which means that the partners are entirely liable for losses the Joint Venture may incur. In practice, the majority of Cooperative joint ventures are set up as limited liability companies.
The other major difference between a cooperative joint venture and an equity joint venture is that, in a cooperative joint venture, profits can be allocated according to the partners' discretion and do not have to be proportional to the investments made by the partners. The parties may also agree that one party recovers its investment through an accelerated repayment structure, whereas the other party will become the owner of the Joint Venture's assets after termination of the joint venture.
