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 fulfill 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 developed from con sortes, which is the plural of Latin consors. It can roughly be translated as united by fate. The english word consort probably has the same origin.
In 1970, they officially formed a groupement d'intérêt économique (which is a consortium, in the French legal system). Today, Airbus is a Societas Europaea, a shareholding company under European law. Not all consortia are done for profit: The Unicode consortium wants to promote the Unicode standard. It is a non-profit organisation, based in California.
Consortium Facts for Kids. Kiddle Encyclopedia.