However, a joint venture and a partnership are two separate entities, different from each other:
1: A joint venture can be described as a contractual arrangement between two companies that aims to undertake a specific task. Whereas, a partnership involves an agreement between two parties wherein they agree to share the profits as well as any loss incurred.
2: In a partnership, persons involved are co-owners of a business venture and their aim is making a profit. But in a joint venture, it is not just profit that binds the parties together. Joint ventures can be formed for specific purposes. Normally the companies engage in joint ventures for undertaking certain ventures like research and development which will be expensive in nature and impossible to take the same individually.
3: A joint venture involves two or more companies joining together in business, whereas in a partnership, it is individuals who join together for a combined venture
4: The members in a partnership can claim a capital cost allowance as per the partnership rules. Whereas, joint ventures can use as much or as little of the capital cost allowance.
5: In a partnership, members cannot act according to their wishes because they do not have any individual identity. However, a member of a joint venture can retain the identity of his/her firm or property.
6: Although a joint venture is very similar to a partnership, a joint venture is generally more limited in scope and duration.
7: A joint venture is generally considered to be a partnership for a single transaction. Similarly, a joint venture is a less formal relationship than a partnership.
8: The rights and liabilities of joint venturers are governed by the principles applicable to partnerships