Issue Date: 
Monday, October 6, 2014

8 things you must know about Joint Ventures

By Werner van Rooyen

6 October 2014

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 it can be construed as being a Joint Venture. But once the parties of 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.

For more information on Joint Ventures or to get a Joint Venture Agreement please visit our website at www.how2tender.com. You will also find our Tender Manual there - the Tender Manual guides you through the whole process of responding to a Tender or a Request for Proposal.

Until next time.

Title Closing Date Tender No.
Phuthaditjhaba Magistrate Office: Rendering Of Cleaning Services For 24 Months. 2018-10-16 11:00 BL18/ 061
Rendering of travel agency services to the Department of Social Development (excluding MEC & HOD),for a period of 36 months. 2018-10-05 11:00 NC/ SOC/ 013/ 2018
Supply , Delivery and Off-loading of Perishable Provisions for Thohoyandou and Polokwane management areas ( Limpopo Province) 2018-11-06 11:00 LMN 06/ 2018 LIMPOPO
Appointment of service providers to implement The Animal and Veld Management Programme (AVMP) Soil Rehabilitation Projects in Spitskop and Zandmartinsdrift Land Reform Farms in the Edinburg area in Kopanong Local Municipality within Xhariep District Municipality as well as in De Hoop Land Reform Farm in the Bloemfontein area within Mangaung Metro Municipality in the Free State province. 2018-10-05 11:00 PSSC- RID- FS 0004 (2018/ 2019)
Supply, Delivery and Off-loading of Perishable Provisions at Klerksdorp, Rooigrond and Rustenburg Management Areas (North -West Province) 2018-11-06 11:00 LMN 04/ 2018 NORTH - WEST
Appointment of service providers to implement The Animal and Veld Management Programme (AVMP) Soil Rehabilitation Project in Rietfontein Land Reform Farm in the Soutpan area in Masilonyana Local Municipality within Lejweleputswa District Municipality in the Free State province. 2018-10-05 11:00 PSSC- RID- FS 0003 (2018/ 2019)
Supply , Delivery and Off-loading of Perishable Provisions at Barberton ,Bethal and Witbank management areas( Mpumalanga Province) 2018-11-06 11:00 LMN 05/ 2018 MPUMALANGA
Appointment of a service provider to render security guarding services at the Department of Public Service and Administration for a period of two (2) years. 2018-10-12 11:00 DPSA002/ 2018
Provision of Geographical Information Solution (GIS) including maintenance and support services. 2018-10-24 11:00 RFP 29/ 2018
6000 units of emollient bp cream with chlorocresol 500g, or equivalent 2018-10-08 11:00 ZnqLS443/ 18gaz
Butterworth Magistrate: Repairs & Servicing of Air-Conditioners. 2018-10-11 11:00 MTH 59/ 2018
36 units of Dextran 40, 10% in sodium chloride injection iv solution, 0.9% 500ml (Rheomacrodex), or equivalent 2018-10-08 11:00 ZnqLS442/ 18gaz
Drain cleaning and verge maintenance on Road P242, from 0.00KM TO 9.9KM. 2018-09-27 11:00 ZNT373T/ 2/ 4/ CDUR/ 601/ S/ 10/ 2018- 19
Drain cleaning and verge maintenance on main road P100 section 1&2 between chainage 0.00KM to chainage 14.5KM. 2018-09-27 11:00 ZNT373T/ 2/ 4/ CDUR/ 601/ S/ 05/ 2018- 19
Supply and Delivery of Dairy products and Maize Drink to the Gauteng Provincial Government (GPG) Departments and State Information Technology Agency (SITA) for a period of 36 months 2018-10-12 11:00 GT/ GPT/ 126/ 2018
Betterment and graveling on road D755 from KM 1.80 TO KM 2.80. 2018-09-27 11:00 CDUR/ 620/ S/ 03/ 2018
Supply and Delivery of Self-Adhesive Pharmaceutical Labels to all Hospitals/Institutions under the control of the Department of Health, Western Cape Government for a period of three (3) years 2018-10-19 11:00 WCGHSC0168/ 2018
Installation of Speed humps and Rumble strips on P129. 2018-10-23 11:00 ZNT373T/ C237/ 12000/ S/ 13
Request for Proposals to assist the ARC with the travel, accommodation and conference services for all the ARC offices nationally 2018-10-22 11:00 ARC/ 11/ 09/ 18
Installation of Speed humps and Rumble strips on P1-8. 2018-10-23 11:00 ZNT373T/ C237/ 12000/ S/ 12

Pages

Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

  • Easy to establish as there are no formal procedures... Read More
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