![]() In the same year, Teck Resources announced the completion of its joint venture with Sumitomo Metal Mining Co to develop Quebrada Blanca 2, the expansion phase of Teck's copper mining operations in Chile. This is a classic example of companies finding synergies in the co-location of their assets. In 2019, Barrick and Newmont partnered to combine their assets in Nevada – creating the world's largest gold complex. ![]() 18 lakhs.Joint ventures (JVs) in the mining industry are on the rise. 60 lakhs in terms of the ratio of 7:3, Amit will get Rs. Since they are sharing the total profit of Rs. Hence, the ratio of their individual contributions was 70:30, i.e. 70 lakhs as his share of the total expenses, while Suraj’s contribution was Rs. Calculate their share of the profits.Īnswer: Amit spent a total of Rs. 60 lakhs, which they decided to split in terms of their contributions. Their total profit from the joint venture was Rs. Suraj carried out the job of constructing the building at the cost of Rs. 20 lakhs more for various permissions, clearances and fees. 50 lakhs for the building and further spent Rs. Question: Amit and Suraj are builders who entered into a joint venture to construct a residential apartment building. If there is no agreement to this effect, they have to share profits equally or according to the contribution they made during their admission into the joint venture. The parties always agree on the ratio in which they will share their profits and losses. Parties can create a joint venture by exercising control on any of the following aspects: The parties can, however, continue working together as well if they mutually agree to do so. Since all joint ventures are created for a specific purpose, they generally come to an end once that purpose is fulfilled. This agreement states details like their obligations, profit/loss sharing ratios, their rights and liabilities, etc. the co-venturers, generally execute a written agreement between them. They generally state this purpose clearly in their agreement. Parties create joint ventures keeping pre-determined purposes in mind. Features of Joint VenturesĪ joint venture typically has the following features. Now that we have the meaning of joint ventures and some examples of them out of the way, let’s take a look at their features. ![]() People generally create such ventures in India for construction activities, trading businesses and manufacturing industries. Individuals also can create joint ventures for similar purposes. Ltd, working in the automobile and insurance industries, respectively. Other popular Indian joint venture companies include Mahindra-Renault Ltd and Bharti-AXA General Insurance Co. India’s famous Hindustan Aeronautics Ltd. A company that manufactures aircraft can enter into joint ventures with other companies for supplying it with special parts and they both together can enter newer markets. Requirements for large capital amounts and access to technology are typical characteristics of this industry. ![]() Let’s take the example of the airline industry. People also form joint ventures to reduce their risks while entering new markets. Most joint ventures are formed when business groups or individuals lack funds or technical knowledge and expertise. Now that we are clear with the meaning of joint ventures, let us now understand the concept better using some examples.
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