Difference Between Joint Venture and Consignment:
Learning Objectives:
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What is the difference between
joint ventures and consignment?
Parties:
In joint venture, parties to
the agreement are known as co-venturers while in consignment they are termed
as consignor and consignee.
Compensation:
Co-venturers are the partners
in the venture and share profits or losses of the venture. Where as
consignee is never a partner. Consignee gets his commission for acting as an
agent for consignor.
Relation:
Each co-venturer is a partner
as well as the agent of other co-venturers. Where as consignee is the agent
of his principle i.e., consignor.
Termination:
Relationship of co-venturers
comes to an end when venture is completed. Where as relationship of
consignor and consignee continues until terminated by parties.
Investment:
Co-venturers, usually,
contribute towards the capital of the venture (in the form of money or
materials) but consignee does not contribute towards the capital.
Rights:
Co-venturers enjoy equal
rights as partners but consignee only acts as an agent.
Ownership:
Co-venturers are the owners of
their venture but in consignment the consignor is the owner not the
consignee.
Account Sales:
Consignee is required to send
account sales to consignor. Co-venturers exchange the relevant information.
No regular reports are submitted.
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