Joint Venture in Construction J.V (PPMO)

Overview

 

To start with, let's first understand what J.V. is.

It's a partnership between two or more companies to do joint business and complete a project or contract. To execute a specific goal, what multiple firms do is prepare a J.V. agreement with their mutual consent. A joint venture agreement basically sets ground rules and clarifies each other's responsibilities to ensure business partners are protected in the event of a dispute. Multiple parties combine their individual resources to carry out the task with the aim of capacity-building.

Minimum Criteria for J.V.

You can basically include two to three individual firms to form a joint venture. Each individual firm should operate for at least 3 years to take part in J.V. Minimum criteria are mentioned in bid documents for tenders on the invitation to bid page. Between the J.V. partners, there are two parties: one is the lead partner, and the other is the partner. Lead partners should match all of the required criteria as a single entity, while the partner shall match at least 25% of the criteria. In terms of annual turnover, you can also use the index mentioned in the bid capacity section to meet the criteria.

J.V. agreement Sample

A J.V. agreement should be prepared on separate J.V. letterhead. The J.V. name can be fixed with mutual consent.

Date:.................

Joint Venture Agreement

 

This AGREEMENT made on .......................... by and between M/S ………………………….. Registered office at…………………………… (herein after called "lead partner") and…………….Registered office at………………………………. (herein after called "Partner").

Whereas...................................................................................................................has invited bid for ....................................................................................................

Contract No.:......................................................(herein after called "the works")

• The purpose of a joint venture agreement is to supplement and enhance the technical, financial, and administrative capabilities of the joint venture partners in order to successfully participate in the bidding process and to enter into a contract agreement and extend the work in the event that the contract is awarded.
• The application for the bid shall be submitted in the name of a joint venture, which shall be as follows: ………………………… J.V. office…………... Contract no: ……………………………. all correspondence documents shall be addressed in this name.
• The ratio of participation of each individual joint venture expressed as a percentage of the total contract value shall be as follows:

• Lead partner …
• Partner …

• The lead partner shall have the exclusive authority to deal with the employers, incur liabilities, receive payments, and incur expenses, and shall be overall responsible for the entire execution of the contract.
• This agreement will come into force on the date of its signing and shall be enforced until the date of the issuance of the certificates of completion, in case this contract is awarded to the joint venture.

Witnesses of the parties have caused this agreement to execute the day and year before.

Lead Partner                                                                                            Partner

Proprietor:                                                                                               Proprietor:

 

 

Signature and seal                                                                                    signature and seal

 

Required Documents.

If J.V. criteria are matched, you need the following documents to participate in a tender:.

• J.V. bank account (both firms should have accounts in the same bank to operate a single J.V. account)

• J.V. temporary PAN no. from Gharelu tatha sanna udhyogh (TDS deducted from the bill is deposited in this PAN no.)

• J.V Stamp

How to create a J.V. in PPMO?

You can create a JV on the PPMO website. You can see the joint venture option on the top taskbar of the ppmo dashboard once you log in to it. Any partner can initiate J.V. by clicking the Add New J.V. option and searching for a tender of your choice to create a J.V. You can click on Action Bottom ( ) to start a J.V. You have to give the J.V. name and upload the J.V. agreement prepared on J.V. letterhead. On the add joint venture partner option, you have to enter the partner Bolpatra organization number. You can see your Bolpatra ID in the profile option of the dashboard. You have to give the Bolpatra ID of your partner. As you enter the Bolpatra ID of your partner, mail goes to the partner's registered mail. Upon confirmation from the partner, you can proceed further. The rest procedure is as that for single entity. You can look at our previous blog on the tender bidding process in PPMO as a single entity.

Others

The letter of bid and power of attorney shall be on J.V. letterhead. Each partner of the J.V. can issue a VAT bill based on the percentage of the contract value mentioned in the J.V. agreement.