Difference Between the terms: Consignment And Joint Venture Arrangement

Major Differences Between A Joint Venture and Consignment Arrangement

Parties:

·         In consignment, the parties are the consignor and consignee whilst in a joint venture the parties are called co-ventures

Relationship:

·         In consignment, it is principal and agent relationship whilst in a joint venture it is like a partnership

Powers:

·         In consignment, the consignee is the agent who follows instruction from the consignor who is the principal whilst in a joint venture, the co-ventures enjoy full powers as to the sale and purchase of goods and collection of dues, etc

Governing Act:

·         In consignment, as it is a principal and agent relationship hence governed by the Law of Agency whilst in a joint venture it is governed by the Partnership Act

Sharing Profits:

·         In consignment, the consignee is given commission whilst in a joint venture the parties are entitled to profit sharing

Scope/Activities:

·         In consignment, concerned only with the sale of movable whilst, in a joint venture it can undertake all kinds of business activities like construction of infrastructure, film-making and many others and which includes the purchase and sale of goods.

Capital Contribution:

·         In consignment, the consignee do not contribute capital whilst in a joint venture, all the co-ventures contribute funds or capital to the joint venture business.

Number of Person:

·         In consignment, normally two parties namely consignor and consignee whilst in a joint venture it is at least two and can have more parties.