Question

Difference between consignment and joint venture

Answer 1

Answer:

Explanation:

Joint Venture and Consignment are different methods of doing business. If co-venturers consign goods to each other or to third parties, then such transaction can be called as Joint Consignment. It is different from consignment.

The differences between Joint Venture and Consignment are:

Joint Venture:

1. The parties are called co-venturers.

ADVERTISEMENTS:

2. The relationship between the co-venturers is like that of partners.

3. It is a temporary partnership.

4. The profits or losses are shared equally or in agreed ratio

5. All the co-venturers have equal powers to buy and sell the goods, to collect the dues etc.

ADVERTISEMENTS:

6. Capital in cash or in kind is contributed by co-venturers.

7. It ceases to exist when the specific business is completed by the co-venturers.

8. The business may be concerned with buying or selling or contract work or any other activities.

Consignment:

1. The parties are called consignor or principal and consignee or agent.

ADVERTISEMENTS:

2. The relationship between the consignor and consignee is that of principal and agent.

3. It is not a partnership. The agent need not be a agent

4. The agent has no right to share the profits. But he receives commission.

5. The agent does not have any power. He has to follow the principal’s orders

ADVERTISEMENTS:

6. Here capital in cash or in kind is contributed by follow the principal’s orders.

7. It is continuing for any length of time as long as the relationship between the consignor and con­ signee exists.

8. Consignments are meant for sale of goods alone.