Robin Ltd and John Ltd enter into a business undertaking. There is a contractual agreement between the
Question:
Robin Ltd and John Ltd enter into a business undertaking. There is a contractual agreement between the two companies whereby they share control and must agree on all strategic financial and operating decisions. A separate set of accounting databases is established for the undertaking and each investor contributes cash to the undertaking. The intention of the investing companies is to market the product and make a profit. The business undertaking is:
a joint venture because it has been established to operate the business undertaking with the intention of making a profit. | ||
a simple partnership in which two companies operate as partners in a business undertaking. | ||
a joint operation because the investors have agreed to a sharing of control. | ||
none of the others |