Consortium facts for kids
A consortium (which may also be called syndicate) is formed by two or more independent companies, individuals, or other economic actors that work together for a limited amount of time, usually to fullfill a purpose. Consortia are common in the building industries, roads and bridges are often built by consortia. Very broadly speaking there are two kinds of consortia:
- Companies doing the same thing associate for a project. This is usually done, because each of the companies alone would not be able to handle the business, or the risk of faliing would be too big for one company alone. Forming a consortium allows these companies (which are not part of the same holding company) to handle the project.
- Companies doing different things unite for a project. Each company acts on its own, and only bears the risks associated with the parts of the job it executes.
The term can be traced to the 16th century, where it delveloped from con sortes, which is the plural of Latin consors. It can rougly be transalted as united by fate. The english word consort probably has the same origin.
The company Airbus started as a consortium of different companies with the aim of buliding airplanes. In 1970, they officially formed a groupement d'interêt économique (which is a consortium, in the French legal system). Today, Airbus is a Societas Europaea, a shareholding company under European law.
Consortium Facts for Kids. Kiddle Encyclopedia.