Difference between Consignment and Joint Venture

The main points of difference between consignment and joint venture are as follows:-

Parties: –

In consignment there are two parties i.e. the principal and the agent, whereas, in joint venture the number of parties are two or more where all the parties are of equal status i.e., each is principal and agent at the time like partners.

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In case of consignment, the relationship between consignor and consignee is principal and the agent, whereas, in case of joint venture both the co-venture is principal.

Term (Period): –

Consignment is not confined to any specific term or period, but joint venture is confined only to a specific venture.

Business Activity: –

Consignment concern only sale of movable goods, but joint venture may be concerned with any type of business activity with the expectation of a profit such as construction of a road, making of a firm, underwriting a share issue, etc. besides purchase and sale of goods.

Accounting Methods: –

In case of consignment accounts are prepared only be single method, whereas in case of joint venture, accounts are prepared by four methods.

Ownership: –


The owner of consignment is always on consignor and the agent has no right of ownership in the goods being dealt with, but in case of joint venture, all the co-ventures are the joint owner.

Sharing of Profit or Loss:-

The profit on the consignment belongs to the principal; he will bear all the loss and the agent will get only a commission for his work; but in case of joint venture the profit or loss is shared equally by all the concerned parties, unless otherwise decided.

Account sale:-

In case of consignment account sale is prepared for providing the sales information to consignor; but in case of joint venture there is no need to prepare account sale, simply information in other ventures are required.

Valuation of Unsold Stock: –

In case of consignment if goods are unsold with consignee, valuation of stock is essential, but in case of joint venture there is no need of valuation of unsold stock as the joint venture is closed down.

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