One form of realising a joint economic goal may be the establishment of a special commercial capital company for this purpose – a so-called joint venture. It does not have a definition in Polish law. Some reference to this term can only be found in the Act on Competition and Consumer Protection. Article 13 of this act indicates that the intention of concentration in order for entrepreneurs to establish a joint entrepreneur is subject to mandatory notification to the President of the Office of Competition and Consumer Protection. This joint entrepreneur is the equivalent of a joint venture.
Definition of joint venture
The term joint venture can be understood in two ways. Firstly, as a type of business cooperation and secondly, as its specific legal form. Thus, one can speak of a contractual joint venture and a structural joint venture.
One can therefore speak of the following possible organisational structures of a joint venture:
- commercial companies,
- companies with participation of the State Treasury or local government units,
- companies with the participation of other public entities,
- companies established for the purpose of realising a venture within the framework of a public-private partnership),
- spin off companies (e.g. in order to commercialise a solution obtained as a result of R&D activities).
The most common joint venture structure is the limited liability company or joint stock company and, following the introduction of the simple joint stock company into the Commercial Companies Code, also this type of company.
Polish law, due to the rather short history of the free market economy, does not have many references to joint ventures. In this case, it is worth referring to the legal achievements of other countries. The best example is American legislation, from which the practice of joint venture agreements on the European continent derives. It is defined as an agreement integrating the activities of two or more entities, which must meet the following cumulative conditions: (1) the agreement is controlled by the founding entities, (2) the founding entities must not be related to each other, (3) each founding entity is required to contribute financially or in kind (e.g. intellectual property) (4) the agreement is implemented in the form of a separate business entity that (5) creates a new enterprise.
Translating the above into European and Polish standards, economic cooperation based on joint action in the form of a joint venture is characterised by
- existence of at least two entities – entrepreneurs,
- taking joint action,
- aiming to achieve a predefined economic goal,
- the possibility of undertaking activities under a joint company,
- participation in profits and, as a rule, taking joint risks.
Joint venture vs. consortium
In Polish economic conditions, apart from joint ventures, consortia are also distinguished. A consortium may be conducted in the form of a separate company created by several entities or in the form of a consortium agreement, but without the need to establish a separate entity. Therefore, not every consortium may be called a typical joint venture.