BBR Holdings

[Yoyo]

This is interesting. We always assume JV are incorporated.

What is the incentive for going UJV? tax or credit in exchange for unlimited liability??

If you are interested, you may read up on
http://www.tved.net.au/index.cfm?SimpleD...tages.html

How does a contractual joint venture operates?
CJV/UJV
In a contractual joint venture (CJV), the participants each hold their interests in the joint venture directly and in agreed proportions, for example as tenants in common.

However, a nominee is often used to hold the joint venture property as a bare trustee. This is done in order to facilitate dealings with third parties by the joint venture, which otherwise has no legal identity. The nominee often also serves as the operator of the joint venture.

Each participant pays its share of the production costs to the operator, usually according to an agreed budget. The completed product is divided up by the operator and delivered to each participant, who then sells their own product to the market.


Generally speaking, the some of the advantages of UJV as follow:

1. The ability of each party to finance its participation in the joint venture in the manner most convenient to it. This is particularly useful where the respective participants have different levels of assets and financial sophistication;
2. The possibility of offsetting losses against the assessable income of each party;
3. The absence of the need to agree on a common dividend policy as in the case of an incorporated joint venture; and
4. The ability of each party to separately take and dispose of the product produced by the joint venture.

Agreed that tax consideration is a major factor (Point 2).

Hope this helps.