Theory question 105
Business Organisations(a) Define a joint venture.
(b) Identify any three merits of a private company over a partnership.
(c) State any three sources of finance to a public enterprise.
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(a) A joint venture is a business owned and managed jointly by two or more parties (e.g. government and foreign or local private firms), who share the capital, risks and profits.
(b) Any three: limited liability of shareholders; separate legal entity and continuity (not ended by death of a member); can have more members (up to 50) and raise more capital; shares can be transferred with consent; professional management; easier access to bank loans.
(c) Any three: government grants and subsidies; government loans; loans from banks and international institutions; revenue from sales of its goods and services; issue of bonds/stocks; foreign aid; retained profits.
A private company has limited liability while most partners do not.