Difference Between Joint Venture and Consignment:
What is the difference between joint ventures and consignment?
In joint venture, parties to the agreement are known as co-venturers while in consignment they are termed as consignor and consignee.
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.
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.
Relationship of co-venturers comes to an end when venture is completed. Where as relationship of consignor and consignee continues until terminated by parties.
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.
Co-venturers enjoy equal rights as partners but consignee only acts as an agent.
Co-venturers are the owners of their venture but in consignment the consignor is the owner not the consignee.
Consignee is required to send account sales to consignor. Co-venturers exchange the relevant information. No regular reports are submitted.
You may also be interested in other articles from “accounting for joint venture” chapter:
- Definition and Explanation of Joint Venture
- Difference Between Joint Venture and Consignment
- Advantages and Disadvantages of Joint Venture
- Joint Venture Accounting – Journal Entries
- Memorandum Joint Venture Account
- General Questions and Answers About Joint Venture Accounting
- Joint Venture Accounting Exercises and Problems
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