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Joint Ventures A joint venture or syndicate is difficult to define. It generally refers to commercial activities which closely resemble partnerships but lack one or more essential elements. Click HERE for more information on Joint Ventures. A joint venture is regarded as an informal relationship for a temporary period between two or more co-venturers. The co-venturers could be individuals, corporations, or partnerships. Each co-venturer contributes assets to a venture. The co-venturer retains ownership of these assets and, with respect to venture purchased assets, each co-venturer owns its share of those assets. The following characteristics are relevant in considering the business relationship as a joint venture: · The parties intend to operate as co-tenants with respect to the venture and not as partners. · The parties do not intend to share fiduciary obligations · Each party is free to compete with the joint venture. · Each party is free to use any knowledge or information gained from participation in the joint venture · Each party is free to capitalize on any business opportunity that arises out of participation in the joint venture. · The party is allowed to assign their interest without consent of the co-venturers. · Co-venturers are not agents for each other. · The object of the joint venture is to carry out a singly project or a limited number of projects. A carefully written joint venture agreement is required in order to satisfy CRA that a joint venture exists. Click HERE for the taxation of Joint Ventures. Careful planning with a Chartered Accountant is warranted. Contact Keith Anderson CA at (780) 447-5830 if you need advice.
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