In the construction industry, which legal entity is often a temporary arrangement?

In the construction industry, a joint venture is often a temporary arrangement formed for the purpose of completing a specific project or set of projects. This type of legal entity allows two or more companies to collaborate and share resources, expertise, and risks involved in a construction project, without merging into a single permanent entity.

Joint ventures are particularly beneficial in construction because they enable companies to pool their strengths, such as specialized skills or financial resources, to bid for larger contracts or tackle complex projects that may be beyond the capacity of a single firm. Once the project is completed, the joint venture typically dissolves, which differentiates it from other legal entities that are more permanent in nature, such as sole proprietorships, partnerships, and limited liability corporations, which generally have ongoing operations and continuity beyond individual projects.