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.
Occupational health and safety services for resurfacing of municipal roads (Rawsonville, Worcester, De Doorns, Touwsrivier). 2019-04-30 11:00 296861
Terms of Reference for Consultancy Services to Undertake Gender Mainstreaming Study in the Energy Sector in Africa 2019-05-07 15:00 AUC/IED/C/014
Construction of Speed-Humps 2019-05-03 12:00 SCM/2019/114/ENG
For the supply and delivery of safety boots for delivery to Kimberley, Supply Chain Services Warehouse. 2019-04-30 10:00 WRAC/KBC/29581
Supply and delivery of various PPE material on an “as and when” required basis to Bellville 2019-05-14 10:00 BLE RME 2202/2019
SHEQ Dept - Collection and Disposal of Medical Waste on a month-to-month basis not exceeding 12 months 2019-05-07 12:00 PEHR 007/19-20
Construction of Ward 4 Elityeni Internals Streets 2019-05-17 11:00 TECH/MIG 01/2019/20
Construction of Chintsa East Internal Streets 2019-05-17 11:00 TECH/MIG 02/2019/20
Construction of Icwili Sports Field 2019-05-17 11:00 TECH/MIG 03/2019/20
Construction of Ward 6 Youth Centre 2019-05-17 11:00 TECH/MIG 04/2019/20
Provision of Website Management services at KHTVETC for a period of 36 months ( 3 years) 2019-05-23 11:00 KHC Bid 01/2019
Provision of the Secondment of the Water Sector Manager 2019-04-25 11:00 EWSETA/RFQ/11/2019
Appointment of a service provider for the design and construction of houses with basic services infrastructure for evicted farm dwellers from Vaalpoort Farm in Pixley Ka Seme Local Municipality 2019-05-15 11:00 CONMP 0001 (2019/ 2020)
Procurement of Support and Maintenance of VMware Enterprise Licences, the reconfiguration of Enterprise Licenses at Head Office and the Procurement of 12 Additional Enterprise Licences wit x1 VMware vCentre standard including installation and configuration for 36 months 2019-05-10 11:00 RFB 1918- 2018
Request for proposals from reputable and suitably qualified research houses to submit proposals to conduct a Domestic and Departure Tourism Survey for the South African Tourism. 2019-05-10 12:00 SAT 148/ 19
Request for proposal for the appointment of a service provider to render employee wellness programme for the Office of the Public Service Commission (OPSC) for a period of thirty six (36) months. 2019-05-14 11:00 OPSC 001/ 19
The provision of professional catering services for the National School of Government for a period of three (3) years. 2019-05-10 11:00 NSG/ BID/ 12/ 2018/ 19
The comprehensive management and maintenance services of CCTV survailance, access control and intruder alarm systems at the national school of government for a period of 36 months (three years). 2019-05-10 11:00 NSG/ BID/ 13/ 2018/ 19
Supply and delivery of fine aggregate, coarse aggregate, crusher run and rip rap to the Department of Water and Sanitation, Clanwilliam Dam. 2019-06-06 11:00 DWS03- 0419 WTE
Appointment of a Consultant for the Development of 5- Year Business Plan (2019 - 2023) for Sci-Bono Discovery Centre (Sci-Bono) Operations. 2019-05-02 12:00 SCM/CEO/R19-20/11

Pages

Ease of opening a business

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

South Africa is currently rated 88nd when it comes to the ease of doing business according to survey that is done yearly by The World Bank. This is all good and well if you are an overseas investor with a lot of money and looking for new places to invest in. However, if you are a South African with little or no money, doing and / or starting a business in South Africa can be a daunting task!

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