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.
CapeNature seeks a contractor for the installation of a Water and Waste Water Treatment Solution at the Vrolijkheid Nature Reserve, CIDB and Local content conditions apply 2019-09-13 11:00 WCNCB 01/ 08/ 2019
Plant Pathogen Quarantine Facility Upgrade 2019-09-09 11:00 ARC/ 03/ 07/ 19
The Appointment of a Contractor for The Supply and Installation of Outdoor Gym Equipment, Playground Equipment as well as Outdoor Furniture and Landscape Material for the Rehabilitation of Four ILLegal Dump Sites Within Gauteng Province for a Period of 3-Months -3CE/3GB Or Higher 2019-09-06 11:00 GT/ GDARD/ 051/ 2019
Completion Of Coega Vulindlela Vilage Phase 1C 2019-09-09 12:00 CDC/ 107/ 19A
Supply, deliver, install and commissioning of generators : Illembe District 2019-09-25 11:00 ZNB 9709/ 2019- H
Supply, deliver, install and commissioning of generators : King Cetswayo District 2019-09-27 11:00 ZNB 9704/ 2019- H
Replacement, service and maintenance of lifts (16 units) 2019-09-19 11:00 ZNB 5702/ 2019- H
Supply, deliver, install and commissioning of generators : Zululand District 2019-09-30 11:00 ZNB 9685/ 2019- H
Supply, deliver, install and commissioning of generators : Amajuba District 2019-09-25 11:00 ZNB 9707/ 2019- H
Supply, deliver, install and commissioning of generators : Ethekwini District 2019-09-25 11:00 ZNB 9710/ 2019- H
Supply, deliver, install and commissioning of generators : Umgungundlovu District 2019-09-27 11:00 ZNB 9705/ 2019- H
Supply, deliver, install and commissioning of generators : Ugu District 2019-09-27 11:00 ZNB 9703/ 2019- H
Supply, deliver, install and commissioning of generators : Umkhanyakude District 2019-09-30 11:00 ZNB 9706/ 2019- H
Supply, deliver, install and commissioning of generators : Umzinyathi District 2019-09-30 11:00 ZNB 9708/ 2019- H
Supply, deliver, install and commissioning of generators : Harry Gwala District 2019-09-25 11:00 ZNB 9702/ 2019- H
Supply, deliver, install and commissioning of generators : Uthukela District 2019-09-30 11:00 ZNB 9711/ 2019- H
Term Contract For Turnkey Services for Ground Source Develop (Planning, Design, Geo-Hydriological Studies, Sitting, Drilling, Testing And Equipping) Preventative and Corrective Maintenance Of Bore Holes Together With Water Reticulation : to uMkhanyakude District Health Facilities : KZN Health 2019-09-13 11:00 ZNB 5753/ 2019- H
Supply and Installation of Clear VU Fence 2019-09-18 11:00 SCSC 001/ 2019
Appointment of a Panel of Service Providers To Provide Temporary Residential Accommodation During Disasters / Emergencies, to The KZN Department of Human Settlements’ for a Period not Exceeding 36 Months 2019-08-30 11:00 ZNB52/ 2019/ 20HSE
Tourism Kwazulu-Natal (TKZN) invites tenders for construction of access road, new gatehouse, storm water infrastructure and landscaping at Mandela capture site. The works comprise of a guardhouse, access road, pedestrian walkway, attenuation ponds, and fencing. The works to be executed in 6 months. 2019-09-13 12:00 TKZN NO: 08/ 2019

Pages

Tenders and VAT

By Werner van Rooyen

31 January 2019

One question that gets raised during each HowtoTender Workshop is must my business (or I) be registered for Value Added Tax (VAT) in order for me to respond to a tender? Or, must I register my business for VAT?

The answer according to the VAT Act, 1991 (Act No. 89 of 1991) is simple:

  • If your turnover is more than R1 million per annum then you have to register your business (or yourself in the case of a sole proprietor) for VAT.
  • There are commodities that are exempt from VAT and if you... Read More
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