Question

Which of the following statements pertain to a joint venture and not to a partnership business arrangement?

I.It has a limited purpose

II.It is a business relationship between several entities

III.Involves the sharing of gross returns rather than profits

IV.Each person or entity involved is liable only for an agreed-upon portion of the liabilities

V.Allows for the right of each person or entity involved to dispose of any interest in the property subject to the agreement

Review Later
I, III, IV and V only
II and III only
I, II, III, IV and V
I and II only

Answer 1

The statements that pertain to a joint venture and not to a partnership business arrangement are: I and II only.

A joint venture is a business arrangement that is entered into by two or more business entities who pool resources together to venture into a business where resources will be shared.

This is different from a partnership that involves two or more people who decide to run a combined business.

So, the major difference between these two is that joint ventures are mainly entered because of a particular project.

Learn more about joint ventures here:

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