The registered joint venture requires a large number of formalities, including legalized and translated documents from foreign shareholders, the drafting of a shareholder contract, the development and official signing of the statutes and the obtaining of various licenses issued by the competent authorities. As part of a consortium agreement, each member must hire subcontractors who are relevant to their own volume of work, unless the work or services provided by the subcontractor are relevant to the entire project, in which case the associated costs may be shared. First of all, it is not uncommon for large-scale projects to be faced with an overlay of different forms of joint ventures: for example, a UJV can enter into a consortium contract between several contractors with a vehicle supplier, as was the case with one of the Riyadh metro lines. Finally, as we will do later, the fact that a foreign company enters into a contractual joint venture agreement will not prevent that company from complying with the rules governing foreign investment in the jurisdiction concerned. A joint venture agreement, also known as a joint venture agreement, is used when two or more business entities or individuals enter into a temporary business relationship (joint venture) to achieve a common goal. The contractual joint venture (or “project,” as stated in the agreement) does not involve a legal consolidation of the assets of the two parties and is not a separate and distinct legal entity. The degree of integration between the parties to the joint venture is minimal compared to other legal forms of the joint venture. These governance provisions are essential because they will also determine whether and how profits can be consolidated. A specific accounting standard, IFRS 11, defines the principles governing financial reporting and consolidation of companies interested in “common agreements” such as a UJV or consortium agreement.
Other essential clauses of a joint contract enterprise are liability and compensation clauses. GCC employers will always ask members of a joint contract enterprise to be jointly accountable to them. As a result, the members of the joint venture agree contractually on the attribution of liability between them and generally agree on principles that the party whose fault triggered the liability of the joint venture to the employer is ultimately liable for its own fault. Bank accounts are an interesting feature of a joint contract enterprise. Since the joint venture is not a separate legal entity, it will not have its own assets. However, on an exceptional basis, the joint venture`s bank account is the only asset that the members of the joint venture will have in common. Finally, an UJV or consortium agreement will include standard clauses, commonly referred to as boiler platform clauses, which must be considered in any trade agreement, but which should be duly developed in light of the circumstances at hand.  Thus, in its enforcement regulations, the GTPL in ksA deals with contractual joint ventures. Section 31 of this implementing regulation provides that bidders execute their contractual agreement (called a “solidarity agreement”) before submitting their bid and have it certified before the Chamber of Commerce or an equivalent authority. Article 31 also contains several paragraphs on the expected content of such a solidarity agreement. Contractual joint ventures are very often used in the field of oil and gas (EPC, joint project development or enterprise agreements), construction and infrastructure agreements (design and construction agreements), but also consulting services (for example.
B, managing a large number of transactions or consulting on transactions.