CJVs provide a flexible joint venture format. The venture may be, but does not have to be, an incorporated legal person. The parties are free to distribute profit and recover investment capital as negotiated. For example, the parties may agree on a equal equity split but provide for a different profit allocation ratio. CJVs have been popular in projects involving large start-up development costs such as hotels and oil and gas projects.
A CJV must have either a Board of Directors with a Chairman and Deputy Chairman, or a Management Committee, with a Director and Deputy Director, as well as a managerial structure and these functions are similar to those of an EJV described below.