Difference Between Joint Venture and Partnership
Generally Joint Venture and Partnership are considered same thing. But there is a great deal of difference between the two.
Whereas two or more companies join together with a view to run a business in a joint venture, two or more individuals join together to run a business in the case of a partnership. It is the major difference between joint venture and partnership. Two or more people running a business form a partnership while two or more companies running a business form a venture.
Definitions of the two terms are different. Joint venture refers to an agreement between two or more companies that join together in business to carry out a business project like production of goods etc. Their agreement may be intended to share profits and losses in the business equally.
Partnership refers to an agreement between two or more individuals who join together in business. The sharing of profits and losses in the business is equally. It is the main differences between joint venture and partnership.
There are several definite rules in a partnership and individuals are eligible to claim capital cost allowance (CCA) as per the laid down rules. On the other hand in a joint venture the companies use as much as or as little of the CCA as they desire.
Let us see one more major difference between a joint venture and a partnership. A joint venture comes to an end as soon as its set goal is achieved. On the other hand a partnership can last for an unlimited period of time as long as they desire. The condition is that there is a good understanding between the partners.