The Joint Venture The joint venture is perhaps the most basic and straight-forward SPE type.

In a
joint venture, two or more parties come together and engage in a venture that is separate and apart
from their respective entities. 4 The conduit that such ventures can occur through is the SPE. This
conduit can take any number of forms: a partnership, a corporation, a trust, an LLC, etc. Understand
that it's the entity's purpose, not its legal form, that the SPE moniker is derived. An example of a
typical joint venture may be the construction of a gas pipeline to conduct off-shore oil drilling.5 In
this instance, the entire scope of the venture will be transferred to a separate and discreet business
entity apart from the respective companies. The SPE will own both the assets and liabilities
associated with the project. Because of the isolated nature of the project, such a circumstance
creates an attractive situation for investors, as the risks and rewards of the project are now isolated
within the SPE, rather than an investor's success being subject to the fortunes or misfortunes of the
respective corporations as a whole.

-Neal F. Newman, Enron and the Special Purpose Entities - Use or Abuse - The Real Problem - The
Real Focus, 13 Law & Bus. Rev. Am. 97 (2007) https://scholar.smu.edu/lbra/vol13/iss1/5