The “term joint” venture is more a term of commercial convenience than a term of art. Broadly, the term is often used in a business context to refer to a collaboration between two or more parties for a particular undertaking.

Key features of a joint venture include:

• the relationship lacks the key indicia of a partnership;

• property of the joint venture is owned by the joint venture parties as tenants in common;

• management and operation of the joint venture undertaking is conferred on an operator;

• the joint undertaking is commonly (though not always) directed at generating a product, rather than a profit;

• the joint undertaking is a single venture, rather than a repetitious business activity;

• a party's exposure is often limited to its several interest in the joint venture;

• the joint venturers are not each others' agent; and

• the parties' interests are transferable without the technical consequence of the joint venture dissolving.

Joint ventures can be unincorporated and incorporated. In an unincorporated joint venture the contract between the parties determines their rights and obligations. No separate legal structure is created which is distinct from the participants. An incorporated joint venture involves the parties collaborating for the relevant undertaking via a separate legal entity. Often this is a company established under the Corporations Act 2001 (Cth).

The terms of the joint venture should be set out in an agreement between the parties.

The taxation implications of a joint venture structure will be complex and depend largely on how the venture is structured and the parties' agreement regarding sharing of expenses and division of venture assets and product.

See Joint ventures.

Incorporated associations cannot be used to derive financial gain for their members, which confines them almost exclusively as a business structure used in the not-for-profit sector, such as religious bodies, clubs, hospitals and charitable institutions to limit the liability of their members.

The incorporated associations’ legislation is similar, although not uniform, throughout Australia. The Acts are administered by separate regulatory authorities in each state and territory.

Incorporated associations enjoy most of the benefits of companies including:

• status as a separate entity ie its own legal personality with perpetual succession;

• limited liability of members;

• the ability to sue and may be sued;

• the ability to enter into contracts in their own name;

• the ability to appoint agents to transact business;

• the ability to acquire, hold, deal with and dispose of any real or personal property; and

• the ability to pledge assets as security to raise debt finance.

An incorporated association will require a set of rules, akin to a company constitution. The entity is customarily run by a committee appointed in accordance with those rules. Under the state and territory Acts, the entity must also have a public officer. In Victoria, the term “public officer” is replaced with the term “secretary” under the new Associations Incorporation Reform Act 2012 (Vic). See Sch 4, cl 9 of Associations Incorporation Reform Act 2012 (Vic).

The process of registration is similar across the states and territories but not identical. Application is made in the proper form and a fee paid. The proposed name of an incorporated association must be acceptable and substantially the same analysis applies for association names as for business names generally.

Ongoing compliance obligations include financial and other record keeping, holding annual general meetings and filing annual returns. An incorporated association will be subject to the many laws which apply to running businesses generally.

See Associations.

Co-operatives are a democratic, separate legal entity business structure run by the members for their own benefit. The key features of a co-operative business structure are:

• a focus on democratic control;

• open membership;

• distributions to members based on the extent of their dealings with the co-operative; and

• limited return on capital.

There are two forms of co-operatives. Pure co-operatives are trading or non-trading entities registered under one of the state or territory Co-operatives Acts. Hybrid co-operatives are companies registered under the Corporations Act 2001 (Cth), but operate on co-operative principles.

Subject to meeting the criteria set out in the Income Tax Assessment Act 1936 (Cth) a favourable tax treatment can operate for co-operatives, including the availability of special deductions not usually available to other entities or business structures. The special deductions available to qualifying co-operatives include deductions for:

• rebates or bonuses paid to members based on business done by members with the co-operative: s 120(1)(a) Income Tax Assessment Act 1936 (Cth); and

• interest or dividends paid to members: s 120(1)(b) Income Tax Assessment Act 1936 (Cth).

See Co-operatives.

More complex business structures can involve a hybrid of individuals, partnerships, trusts and corporations in a series of layers. Such business structures are typically set up to minimise tax distribution from a “corporation” to members who might be trustees of a “trust” who in turn distribute income to its “beneficiaries”.

Careful consideration should be given to all facets of each type of business structure including detailed taxation advice.