Advantages of a partnership between Alpha Corporation and Omega private limited company in production and selling of calendars with African paintings
The main advantage of this partnership is pooling of both companies resources bringing about availability of sufficient capital. Thus, ensuring access to improved resources like experienced staff, experienced technicians, greater capacity plus financial resources
Second, the both companies have different skills and experiences and therefore the benefit of their common knowledge will be available to the business venture common to them.
Partnership also means sharing of profits and losses in an established ratio implying that risks are borne by both companies in the same ratio.
Thirdly is tapping newer technology and methods of production. Partnership opens up the venue for such advancement.
Joint Venture Contract
The joint venture agreement is made between Alpha Corporation and Omega private limited company on 20th December, 2014.
1. Recitals
1.1 The Alpha Corporation and Omega private limited company agree to establish a joint venture for the purpose of making and selling calendars
Alpha Co. and Omega Ltd. offers to make and sell to Z calendars featuring African paintings.
1.2 Each joint venture will receive a ratio of share and profits that is proportionate to their ratio of capital contributions.
2. Background
2.1 The purpose of entering into this joint venture agreement is to carry out all the relevant and important tasks either directly or indirectly related to the business. The contract also refers to any activity considered important by both parties.
2.2 The contract does not indicate any consent on creating a partnership between the parties. No provision in the contract makes the parties partners or agents of each other or declares any other relationship between them. Hence, each party is solely responsible for their individual decisions and acts and can be held responsible for the omission of the other.
2.3 No party has the authority to act on behalf of the other or carry out any duty in place of the other party.
2.4 Each party to this contract has a right to claim for any charges, loss, damages, expenses and obligations done by the other party as a result of any act or omission of the other party apart from the assigned authority mention by this contract.
3. Administration fees
3.1 For the administration of the joint venture, the monthly fees of $4000 will be paid. The annual budget of the administration will be $48,000. The first fee should be paid by 4th day of next month.
4. Profits
4.1 All the expenditure needed for the operation of the joint venture will be equally paid by Alpha Corporation and Omega private limited company. The profits obtained from this joint venture will be shared between the parties according to the ratio of their capital contributions, paid on 16th July of every year.
5. Sign off
Reference
Mellon, K. (2014). Joint Venture Revealed. e-book: Kerby Mellon.
