The complicated personality of Joint-Ventures
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Date
2025
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Publisher
National University of Lesotho
Abstract
There is a need for collaboration and corporation in the business world in order to realise ultimate
success. Companies are encouraged to join forces in order to maximize the utilization of their skills
and capacities to complete the big development projects in the developing economies. The present
study investigated the formation, regulation and ultimate dissolution of the business relations
between the companies, which had grouped themselves and formed joint ventures in the
performance of tendered projects in Lesotho. It has become evident that there are challenges with
regard to the process of liquidation of the joint-ventures on account of insolvency. The main
challenge is brought by some how complicated and not clearly determinable personality of the
joint-ventures composed of incorporated companies. The law in Lesotho still recognizes
partnerships as mere aggregation of the persons who formed such partnerships. The joint-ventures
are considered as a species of partnerships. The study recommends that the law be amended and
that partnerships be conferred independent legal personality in certain respects, which will make
a process of liquidation of joint-ventures an easily manageable process whereby only the estate of
the partnership shall be considered during the liquidation process. The study further revealed that
the Insolvency Act of 2022 has not sufficiently addressed the problems associated with the
aggregate personality theory accorded to the partnerships in Lesotho, which were encountered inthe sequestration process under the repealed Insolvency Proclamation of 1957, and still to persist
under the present legal regime. The study has further concluded that the extension of personal
liability on the directors of companies in the joint-ventures is rather unjustifiably tramples on the
notion of limited liability. It is recommended ultimately that culpable conduct on the part of the
directors has to be main consideration for the extension of liability for damage or loss to the
company on the directors.