Asked by Alejandro Bernal on Jul 04, 2024
Verified
Which of the following statements is true regarding joint ventures?
A) Participants in a joint venture usually share profits equally, but share losses based on the percentage of contribution.
B) Participants in a joint venture usually share losses equally, but share profits based on the percentage of contribution.
C) The joint venture is not automatically terminated when one of the members dies.
D) A joint venture requires the filing of a formal agreement with the state.
E) Courts frequently apply sole proprietorship law to joint ventures.
Joint Ventures
A business arrangement between two or more parties who agree to combine resources for the purpose of accomplishing a specific task or project.
Share Profits
The distribution of a portion of a company's earnings to its shareholders as determined by the board of directors.
Share Losses
In investing, refers to the apportioning of financial losses among shareholders or partners in proportion to their ownership or interest in the enterprise.
- Assess the agreements of joint ventures and their legal enforceability.
Verified Answer
PF
Phantom FantasyJul 11, 2024
Final Answer :
C
Explanation :
Joint ventures do not automatically terminate upon the death of a participant. Instead, the continuation or termination of the joint venture upon such an event depends on the terms set out in the joint venture agreement. This flexibility is one of the characteristics that distinguish joint ventures from partnerships, where the death of a partner can lead to automatic dissolution unless otherwise agreed.
Learning Objectives
- Assess the agreements of joint ventures and their legal enforceability.