Joint Venture Agreement

What is a Joint Venture Agreement?

A Joint Venture is a separate entity and is not part of the individual participant’s own enterprise. Each member of a Joint Venture only shares the expenses of the specific Tender for which the Joint Venture was established. Income Tax. Each member of a Joint Venture is liable for their own Income Tax.

(1) Apply for More Tenders / Contracts
Joining hands with another Company will give you more capacity, expertise, resources, markets and technology which certain tenders require.

(2) Diversify Risk
With a Joint Venture Agreement, you share the risks of taking on a tender with a venture partner(s). They can take on some of the input cost expenses and you can limit the deal to a specific tender / contract / period.

A Joint Venture is a separate entity that is formed where two or more participants come together to share their expertise to win a specific contract for a set period.

A Consortium Agreement is an agreement only, not a new entity. Here the role and responsibilities of each party is spelled out in terms of which resources (human, financial, technology) are committed to the project. The ‘Consortium’ is formed, then applies for the tender / contract and execute it together.

Joint Ventures are not required to file formal paperwork or documentation of status with state or federal governments. Instead, development of a joint venture is contractual and involves one business entity entering into a contract with another entity.

A Subcontractor Agreement is used when a business hires another business or persons outside of the main contractor’s own business to do work or to deliver services as part of a larger project. The Main contractor stays in charge and solely responsible until the contract is complete.

Our internal attorney, Tsitsi Kinnear has over 6 years’ experience with Joint Ventures. She also has a Law Degree from the University of South Africa.