Issue Date: 
Thursday, January 31, 2019

8 things you must know about Joint Ventures

By Werner van Rooyen

31 January 2019

One of the most popular types of business arrangements that are being used by South Africans, in the Tender environment, is Joint Ventures.

There are eight things that you must know about Joint Ventures:

  1. Definition

A Joint Venture is a strategic cooperation where two or more people and/or companies agree to contribute goods, services and/or capital to a common commercial enterprise for the purpose of a specific tender or request for proposal.

  1. Difference between a Joint Venture and a Private Company

The moment two or more people and/or companies come together; to do business together it can be construed of being a Joint Venture. But once these parties to this business register a formal private company then it is no longer a Joint Venture.

  1. Difference between a Joint Venture and a Partnership

A Joint Venture often sounds much like a Partnership but the main difference between a Joint Venture and a Partnership is that the members of a Joint Venture have come together for a specific Tender or Request for Proposal, while a Partnership is usually formed between two or more people to run a business for an unlimited period of time.

  1. Share expenses

Each member of a Joint Venture only share the expenses of the specific Tender for which the Joint Venture was established.

  1. Income Tax

Each member of a Joint Venture is liable for their own Income Tax. If the Joint Venture is profitable the net income of the Joint Venture will be distributed to each member of the Joint Venture according to their percentage contribution towards the Joint Venture. The members will then be tax in their individual capacity or if the member of the Joint Venture is company, then the gains of the Joint Venture will form part of the income of the company and will be taxed according to company tax legislation.

  1. Ownership

Very important to realize is that each member of the Joint Venture retains ownership of their own personal fixed assets as well as their current assets.

  1. Bank account

It is important to open a separate bank account for the Joint Venture. You do not want your private funds to get entangled with the funds of the Joint Venture.

  1. Set of accounts

Always keep a separate set of accounts for the Joint Venture. You don’t want the Joint Venture transactions to get mixed up with your own transactions or those of your company.

So remember, before you dismiss a Tender or Request for Proposal as undoable, think of teaming up with other businesses and/or people in the form of Joint Venture and bid through the Joint Venture.

To learn more about this and many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth and Cape Town. Book and pay online at www.howtotender.co.za. Please contact Estelle at Estelle@howtotender.co.za should you require more information.

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

Title Closing Date Tender No.
Appointment of professional service provider to manage restoration and invasive plant projects for 4 months: March 2019 – June 2019 2019-02-26 12:00 334/2018/19
Appointment Of A Service Provider For Supply, Delivery And Off-Loading Of Fire Tunic For City Of Mbombela For A period Of 36 Months 2019-03-05 11:00 164/2018
Supply and delivery of electrical cables for a period of three years. 2019-03-20 12:00 51/2018/19
Procurement of accommodation to support the march 2019 grade 12 SSIP Camps 2019-03-01 12:00 CS/SCM/TDU/SSIP/R18-19/37
Appointment of Three (03) Service Providers to Print, Supply and Deliver Stationery for a period of three (03) years 2019-03-20 10:00 PM104/2018
Lambani Bridge 2019-03-20 11:00 47/2018/2019
Supply and delivery of stationery and office supplies for a period of one (1) year 2019-03-06 12:00 52/2018/19
Supply and delivery of cleaning and maintenance products (highly concentrated and concentrated) for a period of one (1) year 2019-03-06 12:00 53/2018/19
Construction of Gwangwatini to Ngalavhani low-level river crossing 2019-03-25 11:00 48/2018/2019
Supply, delivery and installation of 5MVA transformer with auxiliary items at SS5 substation 2019-03-08 14:00 SCM/BID14/2018/19
Appointment of a service provider: Intabazwe / Harrismith extension 3 new surfaced roads Phase 2 2019-03-22 14:00 SCM/BID13/2018/19
Appointment of a service provider: Construction of sewer reticulation network in Namahadi 2019-03-22 14:00 SCM/BID12/2018/19
Appointment of a service provider: Upgrade of Motebang Street in Qwaqwa: 1km – Phase 1 2019-03-22 14:00 SCM/BID11/2018/19
Request for proposal to develop a market development plan for South African manufactured chemicals 2019-03-12 12:00 T03/02/19
Request for sector development and implementation plan to support sustainable veterinary pharmaceutical industry development in South Africa 2019-03-11 12:00 T02/02/19
Department of Science and Technology: Appointment of a service provider to pilot Bio-cultural Community Protocol in Mpumalanga Province 2019-03-04 13:00 RFQ-0000063
Invitation for project tenders (Phase 1): The Uniting Reformed Church Atteridgeville - Alterations and additions to existing church buildings on Erf 1088 no. 19 Matseke Street 2019-03-12 12:00 No reference supplied
Insurance for Msukaligwa Local Municipality for a period of three (3) years. 2019-03-18 11:00 8/3 27/2018
Maintenance of highmast lights: as and when required for the period ending 30 June 2019. 2019-03-18 11:00 8/3 26/2018
Repairing of open kiosk/mini-sub/ pole mounted transformers: as and when required for the period ending 30 June 2019. 2019-03-18 11:00 8/3 25/2018

Pages

8 things you must know about Joint Ventures

By Werner van Rooyen

31 January 2019

One of the most popular types of business arrangements that are being used by South Africans, in the Tender environment, is Joint Ventures.

There are eight things that you must know about Joint Ventures:

  1. Definition

A Joint Venture is a strategic cooperation where two or... Read More

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