However, if the joint venture is official, the members of the joint venture may be jointly responsible for a contract signed by one of their members. As a general rule, the joint enterprise agreement should describe in detail how the joint venture can engage and the powers conferred on the project manager who will act on behalf of the joint venture. However, if a representative of a member, who does not have the right to bind the joint venture, uses the header of the joint venture to enter into a contract with a third party, all members of the joint venture can become jointly responsible. This distinction between a hidden joint venture and an official joint venture is recognized by Qatari law. Although the Trade Corporations Act 11/2015 deals primarily with forms of limited partnerships, it contains certain articles[32] dealing with non-EU joint ventures. These articles give the parties great freedom to organize their contractual agreement; they clarify that, if the joint venture is concealed, a contract entered into by a member of the hidden joint venture binds that member only to the exclusion of the others. 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. [3] For example, an employer may ask a group of bidders to create a registered joint venture for a project. In addition, some operations, such as PPPs, require the installation of a dedicated (integrated) vehicle for structuring and financing reasons.

While P3 projects are expected to be on the GCC`s agenda, most investment projects were previously little funded by the state budget and therefore did not require project funding. However, in certain circumstances, there may be cases where an undisclosed joint venture may play a role in the project: for example, a company may appear as a subcontractor in a project (because it could not be classified as a principal contractor or because it was too late to join the offer), but members of the joint venture of the principal contractors may secretly agree to treat the subcontractor as another member of the joint venture.