Difference between a Joint Venture and a Partnership
Since joint venture and partnership both involve the joining together to get into business, they are somehow considered the same. However, there are a lot of differences between the two.
What is a Joint Venture?
A joint venture is a contract between two or more companies to join together to perform a business task. Because the primary reason for joining together is to perform a business task, the joint venture only lasts until the business task is performed. These companies can share the profits and losses that result in the business and can use any amount of the capitol cost allowance (CCA) as they want.
What is a Partnership?
A partnership, on the other hand, is a contract between two or more people to join together to form a business. There is also an agreement on sharing the profits and losses concerning the business. In a partnership, there are rules with regarding the claiming of the capital cost allowance. A partnership can last as long as the partners have a good relationship with each other.
A brief summary:
- A joint venture is a contract between two or more companies to join together to undertake a business task while a partnership is an agreement to form a business
- Both have agreements on the sharing of profits and losses
- There are rules regarding capitol cost allowance (CCA) in partnerships while there are none in joint ventures
- A joint venture only lasts until the business task is done while a partnership can last as long as the partners have a good relationship with each other