Two licensees each have a monetary bid limit of $50,000 and want to form a joint venture for a $1,000,000 job. Which of the following is true?

The correct response is that the licensees must obtain a separate joint venture license from the board prior to bidding. In many jurisdictions, when two licensed contractors form a joint venture, they are considered a new entity for the purpose of bidding on projects that exceed the individual monetary limits of the contractors. The joint venture can take on the combined capabilities of both licensees, but it typically requires formal acknowledgment from the licensing board. This ensures that the joint venture is recognized legally and meets all necessary regulations before proceeding with a bid on a project of this size.

Obtaining a separate joint venture license helps maintain compliance with local regulations and ensures that both contractors operate within the legal framework regarding monetary limits on bids. This step is crucial for avoiding any future legal complications or disqualifications associated with bidding as a joint venture without proper authorization.

The other options do not accurately reflect the requirements governing joint ventures in the context of contractor licensing. For instance, it's not true that joint ventures are illegal. Collaborating through a joint venture is a common business practice among contractors to combine their resources and capabilities for larger projects. Additionally, simply combining the monetary limits of the two licensees without any formal acknowledgment or licensing may not suffice, as regulatory boards often require explicit registrations for joint ventures.