Consortium

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Contract signed with the AdOptica consortium in Italy - ADS International and Microgate, partnered with Istituto Nazionale di Astrofisica - for design and construction of the largest adaptive mirror unit in the world. Contract signed for final design and construction of largest adaptive mirror unit in the world.jpg
Contract signed with the AdOptica consortium in Italy - ADS International and Microgate, partnered with Istituto Nazionale di Astrofisica - for design and construction of the largest adaptive mirror unit in the world.

A consortium (plural: consortia) is an association of two or more individuals, companies, organizations or governments (or any combination of these entities) with the objective of participating in a common activity or pooling their resources for achieving a common goal.

Contents

Consortium is a Latin word meaning "partnership", "association" or "society", and derives from consors ("shared in property"), itself from con- ("together") and sors ("fate").

Examples

Educational

The Big Ten Academic Alliance in the Midwest and Mid-Atlantic U.S., Claremont Colleges consortium in Southern California, Five College Consortium in Massachusetts, and Consórcio Nacional Honda are among the oldest and most successful higher education consortia in the World.[ citation needed ] The Big Ten Academic Alliance, formerly known as the Committee on Institutional Cooperation, includes the members of the Big Ten athletic conference. The participants in Five Colleges, Inc. are: Amherst College, Hampshire College, Mount Holyoke College, Smith College, and the University of Massachusetts Amherst. Another example of a successful consortium is the Five Colleges of Ohio of Ohio: Oberlin College, Ohio Wesleyan University, Kenyon College, College of Wooster and Denison University. The aforementioned Claremont Consortium (known as the Claremont Colleges) consists of Pomona College, Claremont Graduate University, Scripps College, Claremont McKenna College, Harvey Mudd College, Pitzer College, and Keck Graduate Institute. These consortia have pooled the resources of their member colleges and the universities to share human and material assets as well as to link academic and administrative resources.

An example of a non-profit consortium is the Appalachian College Association (ACA) located in Richmond, Kentucky. The association consists of 35 private liberal arts colleges and universities spread across the central Appalachian mountains in Kentucky, North Carolina, Tennessee, Virginia, and West Virginia. Collectively these higher education institutions serve approximately 42,500 students. Six research universities in the region (University of Kentucky, University of North Carolina, University of Tennessee, West Virginia University, University of Virginia, and Virginia Tech) are affiliated with the ACA. These institutions assist the ACA in reviewing grant and fellowship applications, conducting workshops, and providing technical assistance. The ACA works to serve higher education in the rural regions of these five states.

Commercial

An example of a for-profit consortium is a group of banks that collaborate to make a loan—also known as a syndicate. This type of loan is more commonly known as a syndicated loan. In England it is common for a consortium to buy out financially struggling football clubs in order to keep them out of liquidation.[ citation needed ]

Alyeska Pipeline Service Company, the company that built the Trans-Alaska Pipeline System in the 1970s, initially was a consortium of BP, ARCO, ConocoPhillips, Exxon, Mobil, Unocal, and Koch Alaska Pipeline Company.[ citation needed ]

Aerospace

Airbus example

Airbus Industries was formed in 1970 as a consortium of aerospace manufacturers. The retention of production and engineering assets by the partner companies in effect made Airbus Industries a sales and marketing company. [2] This arrangement led to inefficiencies due to the inherent conflicts of interest that the four partner companies faced; they were both shareholders of, and subcontractors to, the consortium. The companies collaborated on development of the Airbus range, but guarded the financial details of their own production activities and sought to maximize the transfer prices of their sub-assemblies. [3]

In 2001, EADS (created by the merger of French, German and Spanish Airbus partner companies) and BAE Systems (the British partner company) transferred their Airbus production assets to a new company, Airbus SAS. In return, they got 80% and 20% shares respectively. BAE would later sell its share to EADS.

Panavia Tornado

The Tornado was developed and built by Panavia Aircraft GmbH, a tri-national consortium consisting of British Aerospace (previously British Aircraft Corporation), MBB of West Germany, and Aeritalia of Italy.[ citation needed ]

The aircraft first flew on 14 August 1974 and was introduced into service in 1979–1980. Due to its multi-role design, it was able to replace several different fleets of aircraft in the adopting air forces. The Royal Saudi Air Force (RSAF) became the only export operator of the Tornado in addition to the three original partner nations. Including all variants, 992 aircraft were built.

Coopetition

Coopetition is a word coined from cooperation and competition. It is used when companies otherwise competitors collaborate in a consortium to cooperate on areas non-strategic for their core businesses. They prefer to reduce their costs on these non-strategic areas and compete on other areas where they can differentiate better.

For example, the GENIVI Alliance is a not-for-profit consortium between different car makers in order to ease building an In-Vehicle Infotainment system.

Another example is the World Wide Web Consortium (W3C), which is a consortium that standardizes web technologies like HTML, XML and CSS.

Government, academia and industry

The Institute for Food Safety and Health is a consortium consisting of the Illinois Institute of Technology, the Food and Drug Administration's Center for Food Safety and Applied Nutrition, and members of the food industry. Some of the work done at the institute includes, "assessment and validation of new and novel food safety and preservation technologies, processing and packaging systems, microbiological and chemical methods, health promoting food components, and risk management strategies." [4]

France

In France, the consortium, considered a sub-type of joint venture, has important theoretical and practical significance. The French legal system does not provide a definition and does not explicitly use the concept of a joint venture or consortium (groupements momentanés d’entreprises). The consortium agreement in France is a purely contractual cooperative contract that does not entail the creation of a third party. The consortium has no legal personality or legal capacity. The contract is concluded between two or more natural or legal persons who undertake to carry out certain works in order to implement a joint project which consortium members would not be able to carry out themselves. The consortium agreement is not explicitly regulated by the French legislator, but it is admissible in the light of the principle of freedom of contract interpreted from articles 6 and 1134 of the French Civil Code. [5]

United Kingdom

Neither consortium nor joint venture have a legal definition in U.K. law. The second term is usually used to describe various types of agreements where two or more parties cooperate in conducting business activities. This manifests e.g. in the joint distribution of profit, sharing cash, assets, knowledge or abilities. As there are no legal provisions regulating in detail the consortium or joint venture, the relations between the parties participating in this type of agreement—when choosing a joint venture as a collaboration agreement or a special partnership—are subject to common law or the provisions of the partnership law. A consortium agreement governed by the general law of contract, similar to an ordinary partnership agreement, does not create a separate entity. [6]

Germany

In Germany the view prevails that the consortium is a type of internal civil law partnership (§ 705–740 of the BGB). In external relations, consortium members may decide on joint and several liability regulated by § 421 BGB, while internally there is sometimes a release from this liability. Joint ventures often include credit syndicates (Kreditkonsortien), securities issuing consortia, including mainly shares (Emissionskonsortien), construction consortia (Baukonsortien) also referred to as investment (Investitionskonsortien) and profit pools (Ergebnispools). Sometimes, special purpose partnerships established to jointly use construction facilities (Planungsgesellschaften) are listed in one category with the consortium and the pool. Cooperation agreements concluded under German law are not of a uniform legal nature. There is a great wealth of legal forms of cooperation that could be cautiously qualified as consortium agreements. This is in particular a civil law partnership in its internal and occasional variants (Gelegenheitsgesellschaft), as well as a partnership of building contractors (ARGE) and a structure simply referred to as the “consortium.” [7]

Poland

In the Polish legal system, the legal nature of the consortium agreement is disputed. According to the prevailing approach, a consortium is a form of cooperation, different from a civil law partnership, undertaken between economically independent entities already operating on the market in order to implement a specific undertaking that is a segment of the regular activities of these entities, based on an unnamed contract and characterized by a temporary nature, minimization of institutionalization, and lack of separate property, the need to specify how the parties participate in the joint venture and the intention not to establish a “community” with partly own interests (the partnership as such). According to this concept, despite the very broad formula of a civil partnership provided for entities that undertake to cooperate in a designated way to achieve a common economic goal (which is a common element for both types of contracts), the partnership contract do not exhaust all forms of cooperation and automatic qualification of consortium contracts as partnerships is not allowed. [8]

See also

Related Research Articles

Corporation Separate legal entity that has been incorporated through a legislative or registration process

A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity and recognized as such in law for certain purposes. Early incorporated entities were established by charter. Most jurisdictions now allow the creation of new corporations through registration. Corporations come in many different types but are usually divided by the law of the jurisdiction where they are chartered based on two aspects: by whether they can issue stock, or by whether they are formed to make a profit. Depending on the number of owners, a corporation can be classified as aggregate or sole.

Partnership Arrangement in which parties agree to cooperate to advance their mutual interests

A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations may partner to increase the likelihood of each achieving their mission and to amplify their reach. A partnership may result in issuing and holding equity or may be only governed by a contract.

Limited liability company US-specific form of a private limited company

A limited liability company (LLC) is the US-specific form of a private limited company. It is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. An LLC is not a corporation under state law; it is a legal form of a company that provides limited liability to its owners in many jurisdictions. LLCs are well known for the flexibility that they provide to business owners; depending on the situation, an LLC may elect to use corporate tax rules instead of being treated as a partnership, and, under certain circumstances, LLCs may be organized as not-for-profit. In certain U.S. states, businesses that provide professional services requiring a state professional license, such as legal or medical services, may not be allowed to form an LLC but may be required to form a similar entity called a professional limited liability company (PLLC).

Joint-stock company Business entity which is owned by shareholders

A joint-stock company is a business entity in which shares of the company's stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares. Shareholders are able to transfer their shares to others without any effects to the continued existence of the company.

A joint venture is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to access a new market, particularly emerging markets; to gain scale efficiencies by combining assets and operations; to share risk for major investments or projects; or to access skills and capabilities. Work by Reuer and Leibliin challenged the claim that joint ventures minimize downside risk.

Limited liability partnership Partnership in which some or all partners (depending on the jurisdiction) have limited liabilities

A limited liability partnership (LLP) is a partnership in which some or all partners have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from the traditional partnership under the UK Partnership Act 1890, in which each partner has joint liability. In an LLP, some or all partners have a form of limited liability similar to that of the shareholders of a corporation. Unlike corporate shareholders, the partners have the right to manage the business directly. In contrast, corporate shareholders must elect a board of directors under the laws of various state charters. The board organizes itself and hires corporate officers who then have as "corporate" individuals the legal responsibility to manage the corporation in the corporation's best interest. An LLP also contains a different level of tax liability from that of a corporation.

A strategic alliance is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations. A strategic alliance will usually fall short of a legal partnership entity, agency, or corporate affiliate relationship. Typically, two companies form a strategic alliance when each possesses one or more business assets or have expertise that will help the other by enhancing their businesses. Strategic alliances can develop in outsourcing relationships where the parties desire to achieve long-term win-win benefits and innovation based on mutually desired outcomes.

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General partnership association of persons or unincorporated company

A general partnership, the basic form of partnership under common law, is in most countries an association of persons or an unincorporated company with the following major features:

In the context of negotiations, a framework agreement is an agreement between two parties that recognizes that the parties have not come to a final agreement on all matters relevant to the relationship between them, but have come to agreement on enough matters to move forward with the relationship, with further details to be agreed to in the future.

European economic interest grouping type of legal entity of the European corporate law

A European Economic Interest Grouping (EEIG) is a type of legal entity of the European corporate law created on 1985-07-25 under European Community (EC) Council Regulation 2137/85. It is designed to make it easier for companies in different countries to do business together, or to form consortia to take part in EU programmes.

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A business network is a complex network of companies, working together to accomplish certain objectives. These objectives, which are strategic and operational, are adopted by business networks based on their role in the market. There are two categories of business networks — business associations and company aggregations — that help small and medium-sized enterprises (SME) to become more competitive and innovative.


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A person or organization in good standing is regarded as having complied with all their explicit obligations, while not being subject to any form of sanction, suspension or disciplinary censure. A business entity that is in good standing has unabated powers to conduct its activities, which can include business endeavors. Similarly, a person who is in good standing within an organization or educational institution may take advantage of the benefits of membership or enrollment.

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A library consortium is a group of libraries who partner to coordinate activities, share resources, and combine expertise. The International Coalition of Library Consortia is an informal discussion group of such consortia. Library consortia offer significant advantages to increasingly strapped libraries. The sharing of resources, and collaboration on shared goals often enable libraries to deliver higher quality services than they would be able to deliver on their own.

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References

  1. "Contract Signed for Final Design and Construction of Largest Adaptive Mirror Unit in the World" . Retrieved 22 June 2015.
  2. Done, Kevin (2 February 2001). "Survey - Europe Reinvented: Airbus has come of age". Financial Times.
  3. Sparaco, Pierre (19 March 2001). "Climate Conducive For Airbus Consolidation". Aviation Week & Space Technology.
  4. "About". IIT IFSH. Illinois Institute of Technology. Archived from the original on 28 June 2013. Retrieved 21 March 2014.
  5. M. Czerwiński, Grupa wykonawców w prawie zamówień publicznych, Wolters Kluwer, Warsaw 2020, ISBN   978-83-8187-313-0 (PL), p. 107
  6. M. Czerwiński, Grupa wykonawców w prawie zamówień publicznych, Wolters Kluwer, Warsaw 2020, ISBN   978-83-8187-313-0 (PL), p. 121
  7. M. Czerwiński, Grupa wykonawców w prawie zamówień publicznych, Wolters Kluwer, Warsaw 2020, ISBN   978-83-8187-313-0 (PL), p. 132
  8. M. Czerwiński, Grupa wykonawców w prawie zamówień publicznych, Wolters Kluwer, Warsaw 2020, ISBN   978-83-8187-313-0 (PL), p. 175