Collectives - a joint venture only bigger? o Aggregation of similar assets o Creation of critical mass Bridging a gap. You might not have had the money or the people etc but found people that have all of those things so you are bringing the strengths together of multiple people. You all go into business together and share the rewards and risks. Sharing the risk Effectively you are either carrying on a business that you couldn’t do alone or you are aggregating with somebody else. Types of Joint Ventures and Collectives Joint Ventures o Incorporated i.e. a company or a Limited Partnership or Unincorporated (effectively just a creature of contract, could also be a partnership from the Partnerships Act 1908 POV) . Effectively its showing how Limited Partnerships and Companies can be used in something other than a wholly owned structure.
o Between iwi groups (eg. Go Bus: Waikato-Tainui and Ngai Tahu). Their investment arms have gone something like 66/33 in Go Bus. o Between iwi groups and other businesses (eg. Waikato Milking Systems: Waikato-Tainui, Ngai Tahu and Pioneer Capital). Collectives o Collectives of iwi who have come together voluntarily for commercial reasons (e.g. ICP) to aggregate assets. o Collectives or iwi or hapu forced to come together for the purposes of negotiating a Treaty Settlement (e.g. Tamaki Collective). o Collectives that choose to operate together are generally going to last a bit longer. Incorporated Joint Ventures Parties to the venture use an incorporated entity to operate their common business o Limited Partnership o Company Incorporated Joint Venture provides benefits of: o Separate legal personality from participants - siloing the risk in another vehicle (2) limited liability o Limited liability for participants - that company or Limited Partnership can do business in its own name, it owns the assets and keeps everything ring-fenced where it is and your liability is limited to what you have put into it. Limited Partnerships are becoming more common here and also displacing unincorporated JVs because they provide you the benefits of a partnership which is the flow through tax with the company aspects around separate legal personality and limited liability. People used to choose unincorporated JVs for the tax position – not paying tax at the entity level but you forgo the separate legal personality and limited liability stuff. Go Bus Unincorporated Joint Ventures UJVs still get used and people still want them. The Basics 1. Legal Personality 2. Participants 3. Governing Documents Legal Personality
No separate legal personality Generally, a creature of contract: o Between two or more parties who come together for a particular purpose o Each participant usually contributes money, property or skills o Doesn’t have to be written.
- Fall '19
- Corporation, Limited partnership, Types of business entity, the Limited Partnership