How do joint ventures differ from mergers?
A) They don't differ because they are the same thing.
B) They are informal rather than formal agreements.
C) The entity has access only to a limited set of each partner's activities or operations.
D) There is more complexity with the former than the latter.

Question

Quizplus · Accepted Answer

Joint ventures involve two or more companies coming together to create a new entity for a specific project or purpose, with each partner contributing assets or resources. The entity that is formed is separate from the partners and has access to a limited set of each partner's activities or operations. Mergers, on the other hand, involve the combination of two or more companies to form a single entity that is no longer separable from the individual partners. The choice A is incorrect because joint ventures and mergers are not the same thing. The choice B is incorrect because joint ventures can be formal agreements, and the choice D is incorrect because joint ventures typically involve less complexity than mergers.

How Do Joint Ventures Differ from Mergers