Question

Distinguish between joint venture company and special purpose vehicle

Answer 1

Joint venture company is normally a business that is normally run by two parties or two individuals who decide to come together in order to form a single entity.

The objective of this joint venture is to access a new market for instance emerging markets, to gain scale efficiencies which can be done by combining  jointly assets and operations or to share risk for major investments.

Special purpose vehicle is normally referred to as or can be used as a funding structure by means of making all the investors to come together into a sinle entity