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slang — Fri, 04 Jul 2008 02:56:27 +0000

Understand some of the basic Types of Joint Ventures

Understand the basic difference between Joint Venture and Partnership

Understand the basic difference between Joint Venture and Consignment

What to include in a Joint Venture partnership agreement

Understand the Potential Issues And Challenges In Joint Venture

Accounting Treatment for Joint Venture

What is the Difference Between Joint Venture And Partnership

slang — Wed, 02 Jul 2008 14:38:46 +0000

For those unfamiliar between Joint Venture and Partnership, tabulated below in summary some of the differences:

Joint Venture	Partnership
Limited to a specific venture.	Not limited to a specific venture.
Partners are called co-ventures.	Persons carrying on partnership business are called partners.
No specific Governing Act for joint venture.	Partnership firms are governed by the Partnership Act.
No common firm’s name in joint venture.	Carried on under firm’s name.
Joint venture is a terminable profit seeking venture.	Partnerships are continuing profit seeking enterprise.
Profit or loss is ascertained after the end of the specific venture.	Profit or loss is ascertained on an annual basis.
The doctrine of implied authority is not applicable to co-ventures	The doctrine of implied authority is applicable to partners.

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What to include in a Joint Venture Partnership Agreement

slang — Fri, 26 May 2006 02:08:25 +0000

During the drafting of the agreement, the following aspects should at least be included:

Definitions ( like technical terms specific to the industry)
Identity of the partners
Purpose of the joint venture
Scope of the joint venture
Activities of the joint venture
Validity period of the agreement including time span of joint venture
Contribution of each partner
Responsibilities and obligations of each partner
Equity share of the partners
Capital structure of the joint venture
Quality commitment from both partners
Scope of technology transfer
Terms of technology transfer
Training of employees
Management: structure including number of directors representing each party, systems, process and procedures
Authority limit to purchase capital expenditure, etc
Authority limits of cheque signatories
Ancillary and supplementary agreements covering suppliers and distributors
Preparation and submission of financial statement to the joint venture partners
Business policies
Profit sharing terms
Implementation schedule
Avenues for settlement of disputes and resolution of conflicts
Legal details for example compliance with any specific laws of the country
Event of breach and possible remedies
Events which lead to termination of joint venture partnership
Any other special clauses

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What is the potential Issue(s)/challenge(s) in Joint Venture Partnerships

slang — Fri, 26 May 2006 02:07:16 +0000

Generally, we need to understand what might be the potential issues when setting up a joint venture partnership. This might includes the following:

Conflicts of interest if they are competitors
Unable to delineate areas of responsibility
Mistrust of each other
Fear of loss of know-how
Cultural barriers
Different business practises
Differing in ideas about pay systems and criteria of recruitments
Strategic needs of the partners in terms of safety, autonomy and/control
Disputes in profit sharing methodology,
Non alignment on authority limit of each partner
Dominance of one partner in the new entity
Protection of minorities

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What Are Some Of The Basic Types Of Joint Venture Partnership

slang — Fri, 26 May 2006 02:06:14 +0000

The following are the basic types of Joint venture partnership:

• Complementary technology joint ventures- the partners combine their technologies to diversify their existing product or market portfolios

• Market technology joint ventures – combination of the market knowledge of one partner with the production or product know-how of the other

• Sales joint venture- the producer and a local partner cooperate in an arrangement which is a mixture of independent representation and own branch

• Concentration joint ventures- competing partners cooperate to form larger and more economical units

• Research and development joint ventures – where the aim is to create synergy by making joint use of research facilities, exploiting opportunities to specialize and standardize, combining know-how and sharing risks

• Supply joint venture where competitors with similar input needs cooperate to safeguard supplies, reduce procurement costs or prevent the entry of new competitors.

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