What is the Difference Between Joint Venture and Partnership?

The main differences between a joint venture and a partnership are their purpose, duration, liability, and profit-sharing arrangements. Here is a comparison of the two:

Joint Venture:

• A joint venture involves two or more persons or entities joining together for a particular project.
• It is typically formed for a single goal or project, with a limited duration.
• Each party is responsible for its own actions and is liable only for its share of the venture's liabilities.
• Profits and losses can be allocated based on contributions or a predetermined formula.

Partnership:

• A partnership involves an agreement between two or more parties wherein they agree to share the profits as well as any losses incurred in a single venture.
• It usually involves individuals who join together for a combined business, with the intention of continual business.
• In a partnership, each partner is personally liable for the partnership's debts and obligations, and they share profits and losses equally.
• The partnership agreement lays out the terms of the partnership, covering topics such as sharing in profits and losses, how partners can leave the partnership, and the percentage of control held by each partner.

In summary, a joint venture is a collaboration between two or more entities for a specific project, with each party being responsible for only its share of the venture's liabilities, while a partnership is a more long-term arrangement where individuals join together for a combined business and share profits, losses, and personal liability.

Comparative Table: Joint Venture vs Partnership

Here is a table comparing the differences between a joint venture and a partnership:

A joint venture is a temporary collaboration established for a specific purpose or project, which ceases to exist once the objective is achieved. On the other hand, a partnership is a long-term association where two or more individuals collaborate for ongoing business operations.