JOINT VENTURE NOTES – B.COM FIRST YEAR NOTES

JOINT VENTURE NOTES

QUESTION: Difference between Joint Venture and Partnership?

PARTNERSHIP

Partnership business is a business where two or more persons agree to carry on commercial activity to earn profits. From legal point of view, partnership firm is not a separate legal entity. In other words, it has no existence separate from its partners. It means that in case of bankruptcy of partnership firm, private estates of partners would be liable to meet the firm’s debts.

The partners act both as an agent or principal of the firm. The persons who entered into a partnership with one another is collectively known as Partnership or individually known as Partners. The name of the partnership business is known as Firm Name.  The partnership business is governed under Indian Partnership Act, 1932.

JOINT VENTURE

Joint venture may be defined as temporary partnership between two or more persons without the use of firm’s name for a specific purpose and limited time period. In other words, two or more persons agree to undertake a particular venture and to share the profits and losses thereof in an agreed ratio. The relationship of co-venturers is governed by the partnership law of land.

Joint venture normally enters into either

• To complete a particular job
• For a pre-contracted time limit period after which they are automatically terminated.

DIFFERENCE BETWEEN JOINT VENTURE AND PARTNERSHIP

BASIS OF DIFFERENCE	JOINT VENTURE	PARTNERSHIP
Members	The members of business are known as CO-VENTURERS.	The members of business are known as PARTNERS.
Use of the firm name	In case of joint venture, there is no specific firm name.	In case of partnership, the firm has its own name.
Duration	It has short duration of time.	It is for long period.
Method of Accounting	It follows the cash basis of accounting.	It follows the Accrual basis of Accounting.
Freedom to carry on the same business activities.	The co-venturers are free to carry on the business of the same nature.	The partners are not allowed to carry on the same business as of the firm.
Maintenance of Accounts	The accounts are maintained in two ways i.e. separate set of books are maintained and not separate books of accounts are maintained.	In this only separate set of books are maintained.
ASCERTAINMENT OF PROFIT/ LOSS	The profit or loss is determined on the basis of each venture individually.	The profit or loss is determined on the periodical basis.
LEGISLATION	No specific act is there for joint venture.	Partnership is governed under Indian Partnership Act, 1932.
Doctrine of Implied Authority	The Doctrine of Implied Authority is not applicable to Co-venturers.	The Doctrine of implied authority is applicable to partners.
Concept followed	The joint venture accounts are made by following the liquidation concept.	The partnership accounts are maintained by following Going Concern Concept.
Settlement of Accounts	The accounts are settled on the completion of the venture.	The accounts are settled at the time of retirement, death, dissolution of partnership.

Also Study	Also Study	Also Study	Also Study
Accounting	Non profit organisation	Depreciation	Liquidity ratios
Nature of Accounting	Receipts and Payments Account	Depreciation Accounting	Acid Test Ratio
Benefits of Accounting	Scope of accounting	Hire Purchase Accounting	Cash Ratio
Difference between cost accounting and financial accounting	Financial accounting, cost accounting and management accounting	Difference between hire purchase and instalment system	Financial ratio analysis
Difference between transaction and event	Transactions	Users of Accounting	Ratio analysis
Limitation of Accounting	Capital Expenditure	Instalment System	Difference between consignment and sale
Book Keeping	Revenue Expenditure	Reserves Accounting	Abnormal loss vs normal loss in consignment
Accountancy	Difference between capital and revenue expenditure	Provisions	Treatment of loss on consignment
Accounting as science or an art	Accounting Equation	Single entry system	Accounting treatment of consignment
Book Keeping vs accounting	Deferred Revenue Expenditure	Difference between statement of affairs and balance sheet	Joint venture vs consignment
Book keeping vs accountancy	Capital receipt	IFRS	Departmental Accounting
Accounting vs accountancy	Revenue receipt	Balance Sheet	Methods of departmental accounting
Basis of Accounting	Difference between capital and revenue receipt	Profit and loss Account	Allocation of expenses in departmental accounting
Branches of accounting	Difference between accounting concepts and conventions	Trading Account	Inter-departmental transfers
Cash and mercantile system of accounting	Accounting Standards	Voyage Account	Different types of branches
Accounting Principles	Objectives of Accounting	Accounting for Incomplete Voyage	Departmental vs Branch accounting
Golden ru les of accounting	Process of Accounting	Joint venture	Methods of branch accounting
Double entry system of book keeping	Scope of Accounting	Joint Venture Vs Partnership	Incorporation of branch trial balance
Double entry vs Single entry system	Accounting Concepts vs Accounting conventions	Methods of recording transactions in Joint Venture	Garner VS Murray Rule
History of Accounting	Difference between provisions and reserves	Consignment