Joint Ventures in Florida: Legal Definition, Five-Factor Test, and Key Business Risks
Two companies meet for coffee. They agree to “team up” on a limited project, split profits, and “figure the rest out later.” High-fives, then back to work. Six months on, one firm thinks they have a partnership; the other thinks they hired a vendor. Cue the lawsuit.
If you build companies in Florida, you’ll run into the joint-venture (JV) question—sometimes intentionally, often by accident. This founder-friendly guide gives you a clear framework, the Florida rules that actually matter, and a simple checklist to avoid unforced errors.
What a Florida joint venture is (and isn’t)
Plain-English definition. In Florida, a JV is a contract-based relationship where two or more parties combine resources (capital, assets, time, know-how) to carry out a particular business undertaking of limited scope or duration. Florida Bar resources confirm that JVs can be structured flexibly under state law.
Not just for individuals. Corporations and LLCs can be joint venturers, not just people (Florida Business Corporations Act).
Labels don’t control—substance does. Courts look at the actual agreement and the parties’ conduct. Even when documents use different labels, what you do can outweigh what you say. Florida case law provides multiple examples of courts re-characterizing relationships as JVs.
Intent is king (but paper and conduct are the crown)
The parties’ intentions are central to whether a JV exists, and a party claiming a JV must show the parties intended to create one. Courts determine intent under the ordinary rules of contract interpretation. A letter showing someone “got 49% of a project” did not create a JV where the company wasn’t a party, the claimant had no joint control, and there was no duty to share losses.
Courts say the parties’ intent controls; the label on the document doesn’t. Calling an agreement a “joint adventure” has some bearing but isn’t dispositive, and calling it something else (e.g., a “memorandum trust agreement”) doesn’t prevent a JV finding if the substance checks the boxes. Parties can create a JV notwithstanding a prior written contract—courts may infer intent from actual conduct; clear drafting and consistent behavior can also defeat a JV theory.
As to third parties. Between the venturers, actual intent matters; as to outsiders, legal intent and estoppel doctrines can control. If the parties do the things that constitute a JV, they may be treated as joint venturers toward third persons even if they hoped to avoid JV liabilities.
The Florida five-factor test (you need all five)
To create a JV, Florida decisions and the Attorney General identify five elements—plus a contract (express or implied):
- Community of interest in a common purpose;
- Joint control or right of control;
- Joint proprietary interest in the subject matter;
- Right to share profits; and
- Duty to share losses.
Miss one, and you don’t have a JV. What counts as a JV is a question of law; whether your facts satisfy it is a question of fact decided from the whole relationship, not one isolated clause.
Statute of Frauds: when a handshake becomes a landmine
Real estate development JVs. Oral JV agreements to acquire/develop/sell real estate can be enforceable unless they require a transfer of property between the venturers, which triggers the Statute of Frauds and a signed writing. The actual land transfer itself is always within the Statute.
>1-year performance. If the JV cannot be performed within a year, Florida courts have applied the Statute of Frauds—get it in writing. Case law shows repeated enforcement of this rule.
Public-sector twist (if your counterparty is a government actor)
Florida constitutional limits and case law make some public entities poor JV partners. The Jackson-Shaw decision is the touchstone; consult the Attorney General’s guidance and relevant cases before structuring public-private “JVs.”
Tax treatment
Finally, don’t overlook the tax side. The IRS treats most joint ventures as partnerships for federal tax purposes, which means pass-through reporting and potential self-employment tax exposure.
Disclaimer: This post is general information, not legal advice. If you’re structuring (or unwinding) a JV—especially one involving Florida real estate or a public entity—get counsel to review your facts and your paper.
