Joint Venture Contracts In Turkish Law
Joint Venture contracts; it stands out as a form of partnership where multinational companies share responsibility with local firms beside the companies with separate legal entities participating in large projects together, Joint venture is established a combination of two or more real or legal persons and a partnership agreement regardless of any shape condition. Participation rates of partners in profit and loss is generally determined by contract however, in the light of Article 623 of the Turkish Obligations Code, the profit and loss shares, regardless of their capital, are equal. The partners jointly manage the partnership according to the procedures specified in the contract. These contracts may be established for a certain period of time also for a specific business.
These contracts are divided into two as to their type of establishment. The first is joint ventures under contract and the second is joint ventures with capital participation. The contractual joint ventures may have an organization also without the need for any organization it may be operate. The parties involved in the joint venture make a main contract for the purpose of managing the company in line with the common control, becoming a joint venture company or establishing a partnership. Joint ventures based on capital consist of two stages. The first stage is the joint venture agreement between the parties and the second stage is the partnership agreement.
According to Article 620 of the Turkish Code of Obligations, ordinary partnership agreement it is a contract in which two or more people undertake to combine their labour and property to achieve a common purpose therefore parties may also invest other types of capital, such as labour. In addition, in article of 2.5.1 of General Communiqué on Corporate Tax of serial no. 1 Elements of partnerships that constitute a special type of joint venture; it was edited in the shape of the expiring of the liability the completion of the work that is planned to be carried out jointly and with the fulfilment of all duties related to the obligations specified in the Tax Procedure Law, sharing of earnings at the end of the work, have an agreement between the partnership and the employer, business partnership is a business, anticipating that the work to be done together will be realized within a certain period of time, establishment of a partnership with a written contract to conclude a certain work, at least one of the shareholders is a corporate tax payer.
The parties to the Joint Venture contract undertake the task of performing the actions for the same purpose, not mutual acts. For this reason, in the Turkish Code of Obligations, issues such as the noncompetition between the parties, duty of care, equal responsibility were arranged. The joint adventure contract which is seen in energy project and especially in large-scally infrastructure, It is a contractual relationship model that is seen in projects requiring large investment and benefiting from financing opportunities, sectoral knowledge, know-how knowledge of each other.