It depends on the nature of the joint venture. The position under the current South African Companies Act is different from that which has always prevailed in South Africa. Previously, it was possible for the shareholders of a joint venture to enter into a shareholder contract and to provide that the shareholders` pact prevailed in the event of a conflict between the shareholders` pact and the company`s statutes. Under the current South African Companies Act, that is no longer possible. The South African Companies Act provides that a shareholders` pact must be consistent with the “Companies Act” and the incorporation of the company (of its statutes), and any provision of such a shareholders` pact inconsistent with the company`s law or constitution memorandum is null and void in terms of inconsistency. As a result, the parties to the joint venture have added more provisions to the foundation agreement to eliminate any inconsistencies and the risk of such a provision being nullified. Beyond what is expressly agreed in the joint enterprise agreement, how can the parties to the joint venture have debts to each other? First, as the owner of the joint venture agreement, you must understand that there will be financial penalties for non-compliance with the terms of the contract. If one or both parties do not comply with the terms of the agreement, each party has the right to terminate the contract or sue the other party for breach. If the joint venture is a partnership, the partners are jointly responsible for the company`s debts. If a partner pays more than his interest in the corporation, he may be entitled to the balance of the claim under the common law against the other partner.
For joint ventures operated through businesses, the normal accounting and reporting rules applicable to businesses would apply to these joint ventures. For joint ventures through partnerships, they are less regulated by specific legislation, but the general accounting rules for partnerships would apply. Appropriate measures must be taken to ensure the proper accounting treatment of unrelated joint ventures, in accordance with established accounting procedures and procedures. Are there any specific questions that may arise in the event of a joint venture dispute in your jurisdiction with respect to the disclosure of evidence? A UJV must have its own consolidated B-BBEE certificate; where the B-BBEE status of the UJV is determined by the combination of the partitions of each unit that is party to the agreement according to the distribution of turnover/control of the UJV. It is advisable to create joint ventures without legal personality only with regard to considerable opportunities, with a reasonable service component and multi-year contracts. As far as companies are concerned, the interaction between the parties to the joint venture (shareholders) and the company is governed by the Corporations Act and the incorporation of the company. In general, this interaction takes place at shareholder meetings. Issues such as the exchange of information are governed by the South African Companies Act and the enterprise creation memorandum (and, to a lesser extent, the shareholders` pact). As a general rule, information provided to directors appointed by a particular shareholder cannot be passed on to the shareholder who appoints the director.