Issue Date: 
Thursday, October 31, 2019

Types of Joint Ventures    

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

The structure of the joint venture should set out the nature of your partnership.  There are two main types of agreements:

  1. If the joint venture is a business, it will be an incorporated joint venture.  This type is not recommended when one wants to respond to a competitive bid or a request for quotation.
  2. A co-operative arrangement between two existing parties that keep their separate identities is called a contractual joint venture.  This type of joint venture is the safest option to use in responding ton tenders.

In both types mentioned above a Joint Venture Agreement (JVA) is crucial in managing the joint venture.

The joint venture agreement should include:

  • Objectives: keep it simple and try to have no more than five objectives.
  • Funding: both parties need to specify how much funding they will put into the venture, and for how long.
  • Assets: list any assets or employees that will be transferred throughout the duration of the joint venture.
  • Intellectual property: state who owns any intellectual property created during the joint venture and how any financial benefits will be distributed.
  • Roles: clearly indicate who has responsibility for the processes involved during the joint venture.  If you are setting up a new company, the composition of the Board – e.g. Chief Executive and Chief Financial Officer - should be identified and voting rights agreed.
  • Agreement: incorporated joint venture agreements may also need to include a shareholders’ agreement, covering issues such as dividend policy and how the management accounts will be produced and made available.
  • Third parties: any consents or approvals needed from third parties should be explained in the agreement.
  • Finances: state how any profits or losses will be divided between parties.  Liabilities must also be clearly listed.
  • Disputes: specify a mechanism by which any disputes can be resolved, such as arbitration by an agreed third party.
  • Duration: specify how long the joint venture would last.  If it is open-ended the agreement should state the period of notice that each party should give if they want to withdraw.
  • Confidentiality: you may wish to consider a confidentiality or non-disclosure agreement.
  • Principles: include a statement that is not legally binding on the two parties.  Instead it should be a statement of principles – enabling the parties to negotiate a final, legally definitive agreement in good faith.

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 https://howtotender.co.za/tender-expert-form/

Contact us at wernervr@howtotender.co.za should you require more information.

You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender.  It includes examples of completed SBD forms.

Title Closing Date Tender No.
Design, supply, erect, inspect and dismantle of scaffolding at Thornwood Embankment rehabilitation 2020-07-23 10:00 CRAC-DNR-33228
For the hire of a crewed 41.5 x 10m barge and a tug boat with a 10ton bollard pull capacity at seawall, berth 9 pier 1, Durban harbour 2020-07-21 10:00 CRAC DNR 32500
Printing services - AU diary and calendar 2021 - Framework Contract 2020-08-06 15:00 AUC/DIC/G/005
Supply and delivery of 18 x (xqty) hydroulic lifting trolleys for Forensic Pathology Services for 14 hospitals 2020-08-05 12:00 HEAL/208/20/MP Re-advertisement
Supply and delivery of 8 x dialysis machines with RO plant for Rob Ferreira and Witbank Hospital 2020-08-05 12:00 HEAL/209/20/MP Re-advertisement
Provision of Ambulance Services and Outsourcing ERT Services at Matla Power Station for a period of five (5) years. 2020-09-03 10:00 MPGXC006225
Occupational health and safety consultant for a period of three (3) years 2020-07-16 16:00 RFQ/002/2020
Invitation to tender for Farm Rietfontein Portion 47 395 JR 2020-07-28 10:00 IRP265
OHS Agent_Upgrade of Hornlee Sewer_T06 of 2019/2020 2020-07-14 12:00 12/2020/21
OHS Agent_Hornlee_Replacement & Rehabilitation of Existing Water Network_T21 of 2019/2020 2020-07-14 12:00 13/2020/21
Supply and delivery of hand sanitizer, gloves and masks 2020-07-14 12:00 14/2020/2021
Supply and Delivery of Laptops 2020-07-16 12:00 15/2020/21
Provision of loan finance 2020-08-05 12:00 T 01 OF 2020/21
Appointment of a suitable qualified and experienced service provider as auctioneer for a period of three (3) years to conduct the auctions of municipal owned fixed assets, moveable property and impounded vehicles on behalf of the municipality 2020-08-05 12:00 T 02 of 2020/21
Erratum: Extension of validity period for additional: 120 days for electrical database and mechanical database 2020-07-10 11:00 ZNB 5731/ 2019- H/ ZNB 5730/ 2019- H
Erratum: Provide a fully managed enterprise picture archiving and communications system for the Gauteng Department of Health (GDOH) with maintenance and support for a five (5) year period 2020-07-24 11:00 RFB 2186/ 2020
Erratum: Supply & install a hosted internet protocol telephone system & IP phones for the Dep of Higher Education & Training 2020-07-17 11:00 RFB 2158/ 2020
Erratum: Request for Proposals: Appointment of a panel of suitable service providers to supply and deliver office stationery to the NHBRC for a period of three (03) years. 2020-07-10 11:00 NHBRC 41/ 2019
Erratum: Supply maintenance of network cabling for saps for a period of three (03) years 2020-07-24 11:00 RFB 2126 - 2019
Request for Proposal: Establishment of a frame agreement for provision of translation and interpretation services for UNHCR offices in regional bureau of Southern Africa. 2020-08-07 16:00 RFP/020/HCR/RBSA/SUP/019

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