Joint venture is a whole complex of various forms of economic and industrial activity of partners of two or several states. Its content is cooperation in various fields: trade, production, in the scientific and technical, as well as service and investment areas. A form of joint venture can be both public and private. For example, cooperation in space programs.
Signs
Joint venture has a common feature in various and specific forms of activity. This is a mandatory coordination of the economic interests of all participants of the enterprise, since the basis of the partnership is an agreement on personnel, trade or production policy, on remuneration, on management methods and so on. Such a position in the absence of conflict situations will ensure the movement of services or goods to consumers from manufacturers. Subject to these conditions, joint venture will be successful.
Consortium
By combining efforts, financial resources, material resources, participation in profits and risks, a consortium is working. All this is necessary for success, in whatever form joint venture is carried out. This is one of the forms quite common in the world. The consortium ("partnership", "complicity" in Latin) is a voluntary and temporary association in order to solve certain problems. For example, the forms of joint venture are such contractual associations that are intended for the implementation of large projects or targeted programs. When the task is completed, the consortium ceases to exist. During the activity, the subjects of joint venture retain their own economic independence. They may participate in other associations, joint ventures, and consortia. And here funds and property are used that are specially allocated for this target program either by the founders or other sources.
As a rule, the consortium in its activities has no profit and is not a legal entity. The organization of joint ventures is formalized in a simple agreement, and the activities of the participants are coordinated by the leader of the consortium, which receives certain deductions from other participants for this. The leader must represent the interests of the consortium, but he acts strictly within the authority received from other members of the organization. Typically, each of the participants prepares its own proposal for its share of supplies, then one of the individual proposals will be completed with one, the general. The consortium bears responsibility in the face of the customer jointly, since they have a joint business.
International business
These are interstate and intergovernmental economic organizations, international business associations created on the basis of agreements and agreements between the founders. Here, in addition to the consortium, forms of joint venture are: joint-stock company, joint ventures (Russian-foreign), economic organizations and free economic zones. For an interstate organization created on an economic basis, the main function is to coordinate all actions of member countries aimed at cooperation in scientific, industrial or other activities.
An economic organization created on an international basis is engaged in joint economic and coordination activities in the production and scientific fields. Free economic zones will require a separate article, since there are many diverse modifications and a rather complicated mechanism of relations. The joint venture is created, as mentioned above, by different countries with the participation of foreign and Russian capital. This is a concept rather widely interpreted by modern world business practice, combining agreements between firms with certain requirements for participation in equity capital, and without such requirements. These forms of joint venture require a separate discussion.
Joint venture
In world practice, concepts have already been defined that separate joint-stock joint ventures and contractual, that is, contractual. A joint-stock company is created as a joint-stock company by two or more two participants, where each partner in possession has a certain share of the share capital. And the contract company does not create a new company to carry out joint activities. Here, in all respects between the parties, the contractual method of doing business is applied. When considering such a phenomenon as joint venture in Russia, it is imperative to take into account the position held by partners.
If a company wants to find a source of financing, most often it is a small company, which enters into a partnership with a larger company, with more extensive operational and financial capabilities. And for a small business that aims to expand its business, money is often less important than operational capabilities. A large partner company is interested in not only and not so much money as this or that product or service that foreign investments and joint ventures can provide. Therefore, investing in a particular product or service that a partner produces, or in a particular market segment that the partner owns, is more successful than investing in a regular block of shares. Types of joint ventures are quite diverse. Some of them are represented by the UNECE (Economic Commission for Europe).
Partner Responsibilities
1. First of all, there should be an agreement between partners regarding the long-term goals of this business.
2. Partners must combine assets (cash, fixed assets, management experience, intellectual property rights and other means) in order to achieve long-term goals.
3. The investment of the partners, that is, their combined assets, should be carefully considered and evaluated.
4. Inside the joint venture, independent governing bodies should be created that direct all activities only to achieve joint goals.
5. Partners participate in profits and share risks in proportion to the percentage of participation of each party in joint investments.
To create a joint venture, motives that are clear to all participants are needed, a strategy must be developed to achieve a common goal. To do this, it is necessary to increase production efficiency, reduce the amount of capital expenditure, but create new production facilities and capacities. Well-established marketing and sales of products, found access to cheap energy, labor, raw materials work well for this. Savings in the expenditure of resources, which provide a new organization of labor and technology, will increase profitability. Partners must exchange available know-how, licenses and patents. If all these conditions are met, the development of joint venture will be successful.
Other partnerships
The expansion of operational capabilities may occur due to factors such as the opening of a new field of activity or the development of a new consumer market, the acquisition of new channels for marketing or the production base. It is possible to expand and diversify existing production through the release of other goods or move to another sector of the economy. However, all these paths are quite risky. Risks can be reduced by obtaining not only necessary, but comprehensive information. Additional investments are the easiest way.
It is also possible to develop a joint venture by attracting technology, improving the skills of employees, expanding exports and replacing imports. However, the motives for creating a joint venture among partners can differ dramatically, but they will always be based on one of the main strategies (thanks to which, by the way, joint venture arose). This is either a strategy aimed at improving the efficiency of the enterprise, or to expand operations, or to reduce risks when switching to new types of products, or the strategy is aimed at developing by attracting investments (here we need new technologies and highly qualified employees to raise lagging industries or areas of activity).
Law
In Russia, there is a law on foreign investment, according to which the creation of a joint venture is possible in our country in two ways: by establishing a new enterprise or if a foreign investor acquires shares, share - a share in an existing enterprise. Also, foreign capital can acquire it in full. The procedure provided for by the legislation of the Russian Federation is applicable here. If an enterprise with foreign investment is created, which will be engaged in large-scale construction or reconstruction, then appropriate expertise is required. There are many cases when the creation of a joint venture required a conclusion from the sanitary-epidemiological and environmental services.
The constituent documents drawn up by an enterprise with foreign investments determine the subject of activity and goals of the newly created enterprise, with a specific listing of the composition of participants, the size and procedure for generating capital, the size of the shares of partners, the structure, composition and competencies of governing bodies, the decision-making procedure, and the list of issues that require unanimity, and activities on the liquidation of an enterprise should also be highlighted. The constituent documents may contain any other clauses and provisions that reflect the particularities of the operation of this joint venture, but they should not contradict Russian law.
IP
Individual entrepreneurship is carried out by people who are not related to legal entities, and this is the only type of entrepreneurial activity when the creation of a legal entity is not necessary. In the 90s of the last century, a boom occurred - individual enterprises appeared like mushrooms after a light rain. However, such a path for most entrepreneurs was not affordable. In 2013 alone, more than five hundred thousand individual entrepreneurs stopped their activities. Moreover, in most cases, responding to obligations (loans and the like) with your own property.
Individual joint ventures have literally isolated examples. Such a practice has developed that companies of individual size do not want to work with individual entrepreneurs. There are many reasons for this, the main one is the lack of benefits. An individual entrepreneur works, as a rule, on the simplified taxation system, and therefore does not pay VAT to the budget either from goods or from the provision of services. And the partner has to do this, which is extremely disadvantageous, especially when optimizing taxation.An individual entrepreneur is practically not suitable for joint business.
Operating procedure
By registering a joint venture, partners contribute each share of their authorized capital in a predetermined time frame. It happens that foreign investors slow down the implementation of such an obligation somewhat, while the enterprise itself is already operating. If no money is paid within a year, then, according to the law of the Russian Federation on foreign investments, the joint venture will be considered void.
If it works, without having received the full contribution of a foreign participant to the authorized capital, they collect the board and decide whether to liquidate the company or look for another partner to transfer or sell this share to him. If it was not possible to reach a mutual agreement, the decision will be made by the RF State Arbitration. You can apply to the International Court of Vienna or Stockholm. Being initially guilty, the foreign partner will incur legal costs. By the way, in the statutory documents such cases should be provided.
Privileges
Joint venture can not be called the dominant form of cooperation. This is evidenced by regulatory acts that began to adopt an integrated code only closer to 1999. Only in 1998 was its central document, the Foreign Investment Law, created, which provided a long series of benefits to foreign investors.
This is the immunity of enterprises, which is given a state guarantee (if in the authorized capital of the company more than twenty-five percent belongs to a foreign investor). If priority priority investment projects are carried out, import duty rates at customs are unchanged for investors, the same applies to payments that remain in state extra-budgetary funds and federal tax rates.