Partnership and joint venture both are associations of two or more persons and idea behind both of them is to earn profits by doing business or venture; however there are many differences between partnership and joint venture. In simple words partnership is like a television soap opera show which goes on forever while joint venture is like a 3 hour movie which ends quickly, let’s look at some of the differences between partnership and joint venture –
- Partnership is done in order to do a business which is expected to last for a long period of time whereas joint venture is done in order to do a temporary project or business and hence in simple words partnership is permanent while joint venture is temporary in nature.
- In case of partnership various accounts are maintained like fixed capital account, goodwill account, bank account and so on whereas in joint venture firm tend to keep only joint venture as separate account and there are no separate books for joint venture transactions.
- While in case of partnership business profit or loss is ascertained at the end of financial or accounting year whereas joint venture is for particular venture only and hence profit or loss is ascertained after the end of the venture which may happen in a month or may even take whole year.
- Individuals who enter into a partnership are known as partners of the firm whereas individuals who enter into joint venture are called as co – venturers.
- While in case of partnership firm registers a name by which it is known to outsiders whereas in case of joint venture there is no name.
- While in case of partnership there is scope for various things like admission of new partner, retirement of partner or death of partner and hence it leads to change in partnership agreement whereas in case of joint venture these things do not exist.