Joint Venture in Australia: Reasons, Issues, and Manager Obligations

Running head: JOINT VENTURE
Joint Venture
Name of the Student
Name of the University
Authors Note
Course ID

1JOINT VENTURE
Table of Contents
Introduction:...............................................................................................................................2
Reasons for mining companies entering into the joint venture arrangement in Australia:........2
Issues encountered among the junior and major mining firms:.................................................3
Obligations of manager in the joint venture agreement:............................................................5
Conclusion:................................................................................................................................8
Reference List:...........................................................................................................................9

2JOINT VENTURE
Introduction:
In Australia mineral resources are usually owned and governed by the state or
territory where the minerals are found. Every government of both the state and territory is
accountable for permitting and overseeing the licences in order to discover and manufacture
specific minerals within the geographical borders (Clark & Soulsby, 2017). Licence enables
the licence holders towards the exclusive rights in order to discover and specific extract of
minerals inside the geographical boundaries of the license area.
Evidently Australia has the history of overseas investment in the mining projects in
wide variety of natural resources together with coal, iron ore, cobalt and gold. Overseas
investors form the important aspects of growth and success for the Australian mining and
mineral resource projects. The study takes into account the reasons for mining companies on
forming a joint venture in Australia. It takes into the account the issues that are encountered
among the small and major mining firms along with the obligations of manager in joint
venture.
Reasons for mining companies entering into the joint venture arrangement in Australia:
A contractual joint venture can be defined as the unincorporated joint venture that is
based on the contractual co-operations (Yan & Luo, 2016). A contractual joint venture can be
considered appropriate for short-term, solitary purpose or longer venture created for the
purpose of sharing cost and on circumstances where the participants undertakes the decision
of retaining the flexibilities regarding their own treatment for tax expenses. Under the
unincorporated joint venture, participants are bounded by the contract, characteristically a
joint venture agreement for the minerals.
Mining companies that are forming a joint venture in Australian and entering into the
joint venture agreement can be registered as the limited liabilities firm that are known as joint

3JOINT VENTURE
venture in Australia. an incorporated joint venture can hold the merged and jointly owned
business interest as the part of the Australian company. For a mining companies a wide
variety of hybrid contractual and corporate joint venture are used based on the commercial,
legal and taxation requirements of the participants (Sidhu & Christie, 2015). In some of the
cases, alliances are formed by the mining companies to enter in the joint venture in Australia
for an informal basis in order to strengthen the equity investment in one party through other
or through cross investment. Entering into the joint venture will result in arranging the issues
arising out of the board representation, protection of minority rights and arrangement
concerning the acquisition or disposal of the requirements.
Alternatively, based on the impact of taxation for a mining companies entering into
the joint venture might be considered preferential to create a different joint vehicle for every
jurisdiction as opposed to sole firm. A dual structure can be created by the mining entities
entering joint venture in Australia where the commercial groups participants may choose to
stay distinct but are associated with the contractual relations to function as the sole
commercial unit. This enables the mining companies entering into the joint venture to execute
their business activities through the single unit but simultaneously these entities entering the
joint venture to retain their corporate structure (Schepker et al., 2014). However, these forms
of joint venture structure are regularly subjected to several legal and regulatory requirements.
While strictly a partnership, entities entering into the joint venture in Australia have the
advantages of limited liabilities. It enables to limit the partners regarding their liability
towards losses of the venture given that they do not interfere into the daily activities of the
business operations. In such a manner entities entering into the joint venture are identical to
the non-operator and roles operator that are regularly found in minerals and mining firms.