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.
Tender for heritage study: De Rust, Dysselsdorp & Oudtshoorn 2019-03-25 12:00 TD-01/02/19
Provision and administration of an electricity and water prepayment vending system for a contract period ending 30 June 2022 2019-03-25 11:00 TD-05/02/19
Supply, delivery, assembly and installation of various items of furniture and accessories for Thusong Centre in Motherwell. 2019-02-28 11:00 SCM/19-97/G
Expression of interest for the supply and delivery of PPE. 2019-03-14 11:00 SCM/19-139/G
Document: Archiving: Learners and Drivers licences. 2019-03-14 11:00 SCM/19-114/S
Standards of Generally Recognised Acccounting Practices (GRAP) financial reporting training service provider for a two year period 2019-02-28 12:00 SAICA0032019
Provision of Security Services at Various ECDC Owned Premises for thirty Six months (3 years) 2019-03-11 12:00 ECDC/ELN/108/012019
Supply and delivery of Road Construction Material for Taweni Access road 2019-03-11 12:00 IHLM/87/01/2018-19/TS
The appointment of a service provider for Finance, Human Resources and Administration services for a period of 12 months. 2019-02-28 14:00 AIP-01/2019
Upgrading of Server Infrastructure and Development of Unified communication 2019-03-20 12:00 019/2018/19
The appointment of a contractor to design, upgrade, install and commission the control system at the aquarium of the National Zoological Garden in Pretoria. 2019-03-04 11:00 SANBI NZG: 325/ 2019
The appointment of a contractor for remedial work to various existing structures including roofs, aquatic mammal pools, and aquarium tanks at the National Zoological Gardens in Pretoria. 2019-03-04 11:00 SANBI NZG: 327/ 2019
The appointment of a contractor for the design and upgrade of existing gravel roads at the Mokopane Biodiversity Centre in Mokopane, Limpopo. 2019-03-05 11:00 SANBI NZG: 330/ 2019
Appointment of service provider for the procurement new fleet 4x4 double cabs(03) and (06) x sedans for the South African Diamond and Precious Metals Regulator 2019-03-15 11:00 SADPMR03/ 2018/ 19
Request to procure service providers for the purposes of headhunting for executive and senior management positions for a period of three (03) years 2019-03-08 11:00 RFA 1892/ 2018
Appointment of a suitable service provider to conduct situational analysis of successful skills programmes offered by SETA Quality Assurance Partners (QAPS) 2019-03-08 11:00 PUR 6000/ 8
The appointment of a service provider to provide medical surveillance program for 1225 (one thousand two hundred and twenty five) consisting of 72 landfill employees and 1153 general workers over four (4) months. 2019-03-18 11:00 PU058/ 2018
The appointment of panel of service providers for the removal, cleaning and rehabilitation and/or eradication of illegally dumped non-toxic, non-objectionable solid waste and rubble on as and when required basis for thirty six (36) months period. 2019-03-15 11:00 PU047/ 2017
Appointment of service providers for insurance and administration of the subsidized motor transport scheme and the VIP vehicle fleet of the state for the period 1 April 2019 to 31 March 2024 2019-03-08 11:00 RT58- 2019
Invitation to provide catering and canteen services at national health laboratory service head office and Braamfontein office for the period of three (3) years. 2019-03-08 11:00 RFB 156/ 18/ 19

Pages

Tender Knowledge

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Sometimes I am surprised at how little business people in South Africa know about Tenders and the Tender Process. Simple things like terminology and general tender information are difficult for people to comprehend not to mention the Standard Bidding Documents and Tender Pricing.

Unbelievably there are still Entrepreneurs that thinks to respond to tenders are an actual business? You will find that these Entrepreneurs would... Read More

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