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.
Request for Proposal for appointment of service provider to source bulk media buying (space and airtime) for promotion and marketing of the Free State as a Destination. 2021-02-04 11:00 FSGLTA:01/2020/2021
Supply & delivery of protective clothing for public works staff 2021-01-21 12:00 PWBS-Q035/20/21
Supply and delivery of roads materials, equipment and tools 2021-02-02 12:00 T10/2020-2021
Supply and delivery of water and sewer materials, equipment and tools 2021-02-02 12:00 T11/2020-2021
Supply and delivery of electrical materials, equipment and tools 2021-02-02 12:00 T12/2020-2021
Training of 15 municipal employees 2021-02-02 12:00 T13/2020-2021
The replacement of the 120m MET tower cat ladders and landings 2021-01-28 10:00 KBG2013
Zoom Meetings Biz Host 1 year prepay 2021-01-18 11:00 RFQ20/21/104
Asset disposal: Subsea equipment in Port of Cape Town 2021-01-27 12:00 AD0058
Request for quotation: for the supply and delivery of food supplies for UNHCR’s Osire Refugee Settlement in Namibia 2021-01-20 23:45 RSA-2021-001
Supply and delivery of construction material 2021-01-20 12:00 SCM26/11/2020
Supply, delivery, install and service air conditioners 2021-01-20 12:00 SCM27/11/2020
Supply and delivery of the renewal of software licenses 2021-01-29 14:00 27/2021
Sale of vacant business zone I Erf: Erven 232 and 233: Merweville 2021-02-05 14:00 02/2021
Upgrading and Refurbishment of Electrical Networks (132/22/11/0.4KV) for the greater Beaufort West Municipality for the period ending June 2023. 2021-02-19 14:00 SCM 21/2021
Supply of licences for handhelds and meter reading software (re-advertisement) 2021-01-20 12:00 08/2/18/50
Supply and delivery of 3 layer fabric face masks 2021-01-27 12:00 BID 08/2/18/57
Notification of personal protective equipment (PPE) tender 2021-01-29 17:00 PH05012021- Notification of Panel PPE
Sale of scrap transformer oil at Phillipi SS - Western Cape 2021-01-19 10:00 OLT1238511
Provision of Estate Management Services 2021-01-28 12:00 NLM/EMS/2020/2021

Pages

Who is the bidder or his or her representative?

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

In Organ of State tenders, the Standard Bidding Document 4 – Declaration of Inters – ask in paragraph 2.1 the following: “Full name of bidder or his or her representative... Read More

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