Joint Venture vs Consignment 🆚
They look similar (sending goods to sell), but they are legally very different.
Joint Venture: "We are Partners." (Equals) Consignment: "I am the Boss, you are the Agent." (Principal-Agent)
Comparison Table 📊
| Feature | Joint Venture | Consignment |
|---|---|---|
| Relationship | Co-owners / Partners. | Principal and Agent. |
| Ownership | Joint ownership of goods. | Consignor owns the goods. |
| Profit | Shared by all Co-Venturers. | Belongs only to Consignor. |
| Reward | Share of Profit. | Commission. |
| Risk | Shared by Co-Venturers. | Borne by Consignor only. |
| Funds | Contributed by all Co-Venturers. | Provided by Consignor only. |
| Accounts | Joint Venture A/c. | Consignment A/c. |
Joint Venture"A & B put money. A & B share profit."
↓
Consignment"A puts money. A takes profit. B gets commission."
Quiz Time! 🎯
Test Your Knowledge
Question 1 of 5
1. In Joint Venture, the relationship is of:
💡 Final Wisdom: "In Consignment, you work for someone. In Joint Venture, you work with someone." 🤝
Next up: Accounting Procedures - How to record it? 📚