Difference Between Joint Venture And Consignment

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The main differences between joint venture and consignment are as under:

1. Nature
Joint venture: It is a temporary partnership business without a firm name.
Consignment: It is an extension of business by principal through agent.

2. Parties
Joint venture: The parties involving in joint venture are known as co-ventures.
Consignment: Consignor and consignee are involving parties in the consignment.

3. Relation
Joint venture: The relation between co-ventures is just like the partners in partnership firm.
Consignment: The relation between the consignor and consignee is 'principal and agent'.

4. Sharing Profit
Joint venture: The profits ans losses of joint venture are shared among the co-ventures in their agreed proportion.
Consignment: The profits and losses are not shared between the consignor and consignee. Consignee gets only the commission.

5. Rights
Joint venture: The co-ventures in a joint venture have equal rights.
Consignment: In consignment, the consignor enjoys principal's right whereas consignee enjoys the right of agent.

6. Exchange Of Information
Joint venture: The co-ventures exchange the required information among them regularly.
Consignment: The consignee prepares an account sale which contains a details of business activities carried on and is being sent to the consignor.

7. Ownership
Joint Venture: All the co-ventures are the owners of the joint venture.
Consignment: The consignor is the owner of the business.

8. Method Of Maintaining Accounts
Joint venture: There are different methods of maintaining accounts in joint venture.As per agreement the co-ventures maintain their account.
Consignment: In consignment, there is only one method of maintaining account.

9. Basis Of Account
Joint venture: Cash basis of accounting is applicable in joint venture.
Consignment: Actual basis is adopted in consignment.

10. Continuity
Joint venture: As soon as the particular venture is completed, the joint venture is terminated.
Consignment: The continuity of business exists according to the willingness of both consignor and consignee.

Related Topics
Concept And Features Of Joint Ventures
Difference Between Joint Venture And Partnership
Methods Of Keeping Joint Venture Account

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