Question

A consortium is different from a joint venture in that a consortium:?

1) usually operates in a country in which the participants are already active.
2) typically involves a large number of participants.
3) restricts the right to hold an equity position by its major partners.
4) does not involve the creation of a separate legal entity.
5) is formed mainly for executing short-term projects.

Answer 1

A consortium does not create a separate legal entity, differing from a joint venture which typically does. Other business forms include general partnerships, sole proprietorships, and corporations without publicly issued stock, each with unique characteristics.

Step-by-step explanation:

A consortium is different from a joint venture in at least one significant aspect which distinguishes these types of business arrangements: a consortium does not involve the creation of a separate legal entity. A consortium is generally a collaboration between different entities that come together for a specific project or purpose, but they maintain their original separate legal identities. In contrast, a joint venture often involves creating a separate entity. This separate entity created might involve shared rights and responsibilities among the participating entities, and its creation can be for long-term projects as well as a way to enter new markets or combine resources for a specific goal.

Apart from the distinction mentioned above, there are other factors and forms that business entities can take, such as general partnerships, which entail joint ownership and management of a business, sharing profits and liabilities among partners. There are also private companies, which may take the form of a sole proprietorship, partnership, or a corporation without publicly issued stock, providing flexibility and control over business operations.