Company Law

Running head: COMPANY LAW 1
Company Law
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COMPANY LAW 2
Introduction
Definitions of a joint venture and a partnership
A partnership is the association of two individuals or even more individuals to conduct a
co-ownership of a particular business initiative for profit. The income that is obtained from the
business is paid to the associates, who then entitle it on their particular tax revenues
(Mackintosh, 2007). There are 3 forms of partnerships which are; joint venture, limited and
general partnerships, therefore a joint venture is measured as a type of partnership. A limited
partnership permits outside stockholders to have shares in the business, however, the outside
investors have to retain a limited involvement and liability based on their influences. A general
partnership allows all partners’ equal share in the liability, workload and the generated profits,
each partner is actively involved in the operations of the business (Trafford and Proctor, 2006).
A joint venture, on the other hand, is a predetermined agreement that joins two or more
groups for a business execution purpose. Each party involved accepts to mutually share the loses
and profits of the initiative, in this association, the respective parties’ contributions shouldn’t just
be of a similar character or equal (Trafford and Proctor, 2006). However, each co-adventurer
must provide a contribution that enables the enterprise’s growth. The joint adventures are not
developed by the law’s operation; however, a joint venture’s existence enables the establishment
of a confidential relationship. A joint venture has several elements which are; freedom of control
or joint control, the duty of sustaining the loss, community interest in the proceedings of a
mutual purpose and freedom of profit share (Kwon, 2008).

COMPANY LAW 3
The leading cases dealing with the definition of a joint venture
A joint venture, which is defined as an enterprise undertaken by two or even more
individuals in a particular defined project has various leading cases that determine the process.
The essential elements of the joint venture definition are an implied or express agreement, a
mutual purpose intended by the group, each associate’s equality in project control and shared
losses as well as profits (Madhok, 2006). For instance, in the case of the Canny Gabriel Castle
Jackson Advertising Pty Ltd, singers Cilla Black and Elton John got into an agreement with the
promoter (Fourth Media Management Pty Ltd) for the Australian public performances. The
agreement was, Volume Sales Finance (VSF) was to offer a given amount of money as a
sufficient loan to finance the concerts in Australia. The mutual purpose of the groups was to
target the Australian concerts and boost the singers, and VSF obtained one-half of the interest as
stated by the contract this indicates equality in controlling the idea as both sides are able to give
and obtain (Madhok, 2006). The contract concludes that after the loan of VSF is repaid including
any other expenses, the profits obtained via the concerts were to be equally shared between the
VSF and the promoter.
Current issues on the definition of a joint venture
Provision of joint cash control is one of the current matters in joint venture definition.
There is the need for a combined checking account which requires joint signatures, the joint
account ensures that in case of any check disbursement, a signature from each of the partnering
firm is available (Dutta and Weiss, 2007). A second issue is the regular financial apprise of the
business to the partners, the financial statements should be released monthly together with the
bank statements and invoice copies. Each associate should be familiar with the financial
information of the business.