What is a consortium?? This is currently a question of many businesses when they are intending to encroach on the form of bidding. Joint venture is one of the basic terms to understand to support businesses at the stage of learning about bidding.
Because it is also in the set of specialized words, it sometimes causes confusion for many people and to help lamchutaichinh’s readers better understand or debug this concept, please see the article below.
Table of Contents
What is a joint name?
What is a consortium? Then translated into English as “Joint name” means referring to a common name for many groups or organizations to use it as a name for certain activities or businesses that do or cooperate with each other.
The partnership in bidding is similar, more specifically, this is the desire of enterprises with the same goal to participate and sign their names to bid together as a joint venture contractor, while the bidding package can be the whole project according to the invitation document or part of it.
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About what is a joint venture contractor, this name can be applied to any corporate contractor who is bidding independently or the contractor himself combines with many contractors with the same goal for a project of a single unit. some organization.
When conducting a joint venture with each other, the enterprise contractors do not need to create a new legal entity (the legal entity here is a legal subject, which roughly means a general representative organization).
But with a joint venture, contractors only need to choose an agreed contractor to represent the joint venture and be responsible for the image of the whole organization.
In case the relevant contractors have fulfilled their obligations and do not want to cooperate with each other in another bidding project, the joint venture will be terminated.
Currently, a joint venture is quite commonly used in bidding and sometimes people confuse it with the concept of a joint venture.
What are the legal provisions on joint ventures?
Based on Law on Bidding If you have specified a partnership, lamchutaichinh will list in detail the terms and some basic things you need to know, so that you can better understand before conducting a joint venture for the business itself to ensure that there is no violation or violation. Some representative organizations take advantage of it for malicious purposes.
Clause 35, Article 4:
The main contractor (representative contractor) is responsible for participating in the bid, under the name of the bidding project and must directly sign and perform according to the selected contract. An independent contractor or a representative member of a consortium may be the main contractor.
Section h, Clause 1, Article 5:
If there is a foreign enterprise contractor that intends to participate in international bidding in Vietnam, it is necessary to form a joint venture with a domestic contractor or may use a domestic sub-contractor unless the project is too feasible. ability with domestic contractors in any work of the specified bidding package.
Clause 3, Article 5:
When conducting a joint venture, it is necessary to have a form of written agreement that clearly defines the responsibilities of each member, specifically specifying which main contractor – representative organization has general responsibilities or separate responsibilities of each member in the joint venture. joint venture.
Clause 6, Article 11:
In case a joint venture participates in a bidding project, each member has the right to secure the bid separately or agree to appoint a member of the representative organization to be responsible for securing the bid project for themselves and other members. .
Note that when participating in the bid, it is necessary to ensure that the entire cost is not lower than the bid level specified in the request file.
Clause 1, Article 65 & 71:
When it is agreed to jointly participate in a bidding project, especially with a joint venture contractor, it is necessary to have the full signatures and seals of each member on the contract.
How to distinguish joint venture from joint venture?
As mentioned above, a joint venture with a joint venture is quite confusing, especially for those who are just learning about bidding. These two concepts are both homonymous and understood in the sense of cooperation, but in terms of content, they are quite separate and for more details, please refer to the article.
Definition of joint venture
The English joint venture is the same as a joint venture in that the word “Joint” has a certain general meaning, but the difference here is that the word “venture” means to talk about a business, business or institution. some business association.
More clearly, a joint venture is a company or business that has a need to share ownership with one or more partners in cooperation activities in the field of business.
A joint venture is conducted when a new legal entity is formed on the basis of the contribution of the parties in terms of capital, land, equipment and human resources. Note that this legal entity must comply with the provisions of the Enterprise Law.
Simply put, a joint venture company is a separate company established and owns at least two independent legal entities with the same goal or orientation to cooperate in business activities as agreed. .
To put it simply, a joint venture is in the form of cooperation to contribute capital to do business together and may have foreign investment elements. The joint venture combines domestic and foreign investment capital to create a joint venture enterprise, but the cooperation aspect is only within the scope of the parties in the same bidding project.
In order to further clarify the characteristics of these two terms, lamchutaichinh provides you with a small comparison table:
|Linking together to perform certain operations may be bidding on each other’s behalf||Linking together to contribute to the implementation of business and commercial activities by establishing a new legal entity|
|Regulated in accordance with the provisions of the Law on Bidding and is still in force||The first regulation was in the Law on Foreign Investment in Vienna 1987, but now it has been replaced by the phrase foreign-invested enterprises.|
|Also in the form included in the BCC contract||Requirements for establishment in the form of a legal entity|
|The joint venture is considered valid if and only if the content in the document clearly defines the rights and responsibilities of each member and has a signature or seal to ensure||A joint venture is valid when each entity does not commit other administrative violations according to state regulations, commits to being able to pay with the committed capital, and the established legal entity must operate in accordance with the provisions of law. the law|
|If there is an international bidding, they must associate with domestic enterprises or sub-enterprises if domestic enterprises are not capable.||Attracting foreign investors in terms of resources at the same time creating legality for foreign investors to feel secure when working together and requiring strict implementation in accordance with WTO and FTA commitments.|
Regarding the purpose of the joint venture, it mainly wants to help corporate contractors who are not eligible but still have the opportunity to participate in bidding projects that show both competitiveness and local cooperation, often businesses use the form of a joint venture. this method when the capacity profile is not satisfactory or the capital is not enough. Moreover, the purpose of the joint venture is also to divide to ensure progress, quality, safety and environmental sanitation, …
With a joint venture, the purpose of cooperation is also quite specific right on the definition to establish a legal entity for long-term companionship in many projects, not after one or two projects is terminated like a joint venture.
Why establish a joint venture (Joint name) when bidding?
Regarding the reasons for establishing a joint venture when bidding, as mentioned above in the purpose section, most of the reasons stem from the inability of the corporate contractor itself to be able to meet the requirements. conditions of the bidding package on the dossier file.
Therefore, the solution for still wanting to bid for that project but not having enough potential is to find contractors with the same goals to call them to participate in the potential bidding project and be called contractors. joint venture – representing the participating business organizations.
After searching for a partner, your company or business and its affiliates need to draw up a partnership agreement that is a role model. After this stage is completed, a joint venture contractor is formed and can participate in the bidding project if the total cost is not lower than the requirements of the proposed bidding package.
In addition, especially on bidding projects of great value, the participating parties want to optimize the work in the bidding documents to match their capacity, the establishment of a consortium will undertake and at the same time is not responsible as party cases using subcontractors for foreign investors.
Through the article “What is a joint venture? What is the purpose of the consortium?” then part of lamchutaichinh’s readers also better understand this term in terms of usage, purposes and conditions of application. If you find the article good, expect nothing more than to hope that you will still accompany lamchutaichinh in the upcoming articles!
Information edited by Lamchutaichinh.vn