![]() If the JV is incorporated, the parties are able to use the most tax-efficient combination of shares, loans, debt and bonds to invest in its operations. The JV could also operate as an unincorporated arrangement. In terms of legal structure, as with any other business, there are several different types of joint venture: private company, limited partnership, or corporation. Investment firms often form joint ventures to carry out projects where they can see an opportunity but do not directly operate in the industry, for example, building oil and gas infrastructure. In fact, some governments – for example China – require international companies to form JVs with local manufacturers to enter certain markets like the automotive industry. Joint ventures tend to be most common in industries where new projects require specific knowledge and skills and large investment budgets.Ī company might decide to form a joint venture with a local partner to enter a foreign market. Or companies might pool their assets to take on a dominant competitor. One company might have an innovative technical design for a new product while another company has advanced manufacturing capabilities. ![]() What do you need to know about a joint venture?Ĭompanies typically form joint ventures to combine their talent and expertise, benefit from economies of scale and combine complementary resources. When reading a company’s financial reports, you may see revenues, costs and profits recorded from its share of a joint venture. Other joint venture examples include Google Earth, a JV between Google and NASA, and Vevo, a JV between Universal Music Group, Sony Music Entertainment and EMI. Some joint ventures become well-known, such as Verizon Wireless, a telecom joint venture between UK-based Vodafone (VOD) and Verizon (VZ) in the US. Where have you heard of a joint venture?Īs an investor, you will have likely seen announcements from companies you follow and invest in that they have formed a joint venture. The activities of the JV are kept separate from the rest of their businesses, and in some cases, the JV is established as a distinct, third company with management executives from both companies. What does the joint venture mean? In a JV, the parties to the agreement combine their expertise and financial resources, usually to offer a product or service, sharing in the profits or losses it generates. The regulations governing joint ventures formed under SBA MPP are explained in detail in 13 CFR 125.8 and 13 CFR 125.9.A joint venture (JV) is an arrangement between two or more organisations to work together on a particular aspect of their business. Note, the protégé is the responsible party for reporting the evaluation under its DUNS number. Respective, annual reports and project-end reports are due 45 days after each operating year and 90 days after completion of the contract. Annual evaluations are due 30 days from the anniversary date on your welcome letter. The joint venture must submit annual evaluation reports, annual performance-of-work statements, and project-end performance-of-work to SBA and the contracting agencies explaining how the work is being performed for each contract.However, for purposes of determining the protégé’s size, 40% of the revenues under the contract must be appropriated to the protégé. Assuming the joint venture and the protégé perform the minimum work share requirements, the protégé will perform 20% of the contract. The protégé must perform at least 40% of the work done by the joint venture. SBA will continue to review and approve all joint venture agreements formed to pursue sole source 8(a) contracts. This includes joint venture agreements formed under the SBA MPP to perform a competitive 8(a) contract. ![]() SBA no longer approves joint venture agreements formed to pursue competitive 8(a) contracts. In order for your joint venture to be able to bid on contracts reserved for small businesses, you must follow the requirements for receiving an exclusion of affiliation for contracting purposes. The joint venture may also pursue any type of set-aside contract for which the protégé qualifies, including contracts set aside for 8(a), service-disabled veteran-owned, woman-owned, and HUBZone businesses. ![]()
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