Contractors’ organisation
Contractors are usually organized into temporary groups of several companies called Joint Venture (JV) or Consortium. A JV is a business enterprise where two or more participants come together to share their expertise in order to win a specific contract for a set period of time. Once achieved, the company is dissolved. Consortiums do not have deadlines and the current legal instrument is a contract, so the solidarity between the parties is contained in the terms thereof. There are slight differences in these concepts if you operate in Spain or abroad.
Unión Temporal de Empresas (UTE). In Spain it is regulated by Law 18/1982, of May 26, sobre Régimen Fiscal de Agrupaciones y Uniones Temporales de Empresas y sociedades de Desarrollo Industrial Regional. Its main characteristics are:
- Although it must be registered in the Mercantile Registry, it does not become an independent legal entity.
- The UTE constitution contract must be raised to a public deed.
- UTEs are only constituted for the duration of the work, service, or supply.
- Must have a single Manager.
- The responsibility of the debts contracted by the UTE falls on the partners jointly and severally.
Joint Venture (JV). The concept of JV may change from one country to another but is very similar to a UTE. They are generally understood as a commercial agreement with two or more parties agree to pool their resources to perform a specific task with a limited purpose.
A JV has most of the elements of a company, such as shared management, the power of each participant to link the others in the business, the division of profits, and joint responsibility for losses. However, unlike a company, a joint venture anticipates a specific area of activity and / or period of operation, so once the purpose is completed, the bills are paid, the profits (or losses) are shared and the JV is cancelled.
Consorcios. In Spain they are regulated by Ley 40/2015, de 1 de octubre, de Régimen Jurídico del Sector Público, which indicates that consortia are public law entities, with their own and different legal personality, created by various Public Administrations or member entities of the institutional public sector, among themselves or with the participation of private entities, for the development of activities of common interest to all of them within the scope of their competences. Consortia may carry out promotion, provision or common management activities for public services and whatever others are provided by law.
Consortium., There might be different interpretations of its meaning abroad. A consortium is a grouping made up of two or more companies that work together to achieve a common goal. The participants in a consortium share resources but are only responsible for the obligations established in the consortium agreement. Each entity that is under the consortium remains independent with respect to its normal business operations and has no say in the operations of the other members that are not related to the consortium.
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