EFFECT OF PARTNERSHIP AND JOINT VENTURE BUSINESS IN SMALL SCALE BUSINESS IN NIGERIA

1.3 OBJECTIVE OF THE STUDY

The Objectives of this study are as follows;

1. Assess challenges facing Small Medium Enterprises (SMEs) towards establishment of Partnership/joint venture business in Nigeria.
2. Eliminate the constraint encountered by small business owners in partnership/joint venture business in Nigeria.
3. Determine the economy effect of partnership/joint ventures in Nigeria.
4. Ascertained the benefits and importance of setting up a partnership business by small business owners.
5. Provide useful insight on the concept of partnership business, it merit and demerit, as well as importance to the growth of the business.
6. Identify the key actors key actors and facilitators for establishment of new partnership business in Nigeria.

1.4.    RESEARCH QUESTION

The research question provides a framework and guidelines through which substantial knowledge of the research study can be understood.

The research question asked includes:

1. What are the challenges facing Small Medium Enterprises (SMEs) towards establishment of Partnership/joint venture business in Nigeria?
2. What are the constraints encountered by small business owners in partnership/joint venture business in Nigeria?
3. Are there any economy effects of partnership/joint ventures in Nigeria?
4. What are the benefits and importance of setting up a partnership business by small business owners?
5. Are there any useful insight on the concept of partnership business, it merit and demerit, as well as importance to the growth of the business?
6. Who are the key actors key actors and facilitators for establishment of new partnership business in Nigeria?

1.5. SIGNIFICANCE OF THE STUDY

Though, the reasons behind forming a joint venture include business expansion, development of new products or moving into new markets, particularly overseas, yet there's a need to also consider the negative aspect of it when setting it up.

This studies would be relevant to small business owners who may want to  agree to setup a partnership business with another business in a limited and specific way, or small business owners who may also wish to agree to come together in order to generate large profit for their business  as a result of desire for expansion.it will also be useful for partners who wish to set up a separate joint venture business, possibly a new company, to handle a particular contract.

This studies will also be useful to small scale owner by providing them useful insight on the benefit of engaging in a successful joint venturer business such as, access to new markets and distribution networks, increased capacity, sharing of risks and costs with a partner and access to greater resources, including specialised staff, technology and finance.

It will therefore equally be of immense help to the Small and Medium Scale Enterprises Development Agency of Nigeria (SMEDAN), in evaluating the success of its activities with specific reference to the problem encountered by small business owner towards partnership/joint venture businesses.

Finally, it will also be of use to the student, researchers for further research study, the existing and prospective entrepreneur as well as any interested party. It will assist students in their knowledge build-up and appreciation of the business formation of partnership business among the small scale business owners.

1.6. SCOPE OF THE STUDY

The research work has focused on SMEs because these firms in Nigeria account for more than 90% of the country's business, though many studies have been conducted on small-scale, but none of them has looked at the partnership/joint venture establishment in small scale businesses. It is for this reason that our study seek to Assess and evaluate the effect of partnership business  on small business enterprises in Osun Metropolis.

The activities of the regulating body Small and Medium Scale Enterprises Development Agency of Nigeria (SMEDAN),were also put into consideration. However, the research was limited to small and medium scale enterprises operator in osun metropolis due the schedule of the researcher.

1.7. LIMITATIONS OF THE STUDY

As with all studies, limitations exist and must be acknowledged. Moreover, the outcomes were based on the information solicited from the respondents and such might be subjected to human errors, omissions and possible mis-statements.

The limitations of the study are as given below:

1. also the difficulty of timely availability of published data from various government and other agencies doing this job in our country. Researcher also faces the problem on account of the fact that the published data vary quite significantly because of differences in coverage by the concerning agencies.
2. The study could not show the whole scenario of the all small scale business in Nigeria.
3. The questionnaire was not understood by some respondent.
4. Some respondent did not give enough concentration to understand the significant of analysis.
5. The time was not enough to collect the data from the respondent.

1.8. DEFINITION OF TERMS

1. 1.   SMALL SCALE BUSINESS

It is defined as any business undertaken, owned, managed and controlled by not more than two entrepreneurs, has no more than twenty employees, has no definite organizational structure (i.e all employees report to the owners) and has relatively small shares of its market.

1. joint venture (JV)

This is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets. There are other types of companies such as JV limited by guarantee, joint ventures limited by guarantee with partners holding shares.

1. 3.   Partnershipbusiness

 This is an arrangement where parties, known as 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.

1. 4.   Partnership Agreement:

This is a written and formal document which contains such basic information as the name and principal location of the firm, the purpose of the business, and date of inception.

1. Mutual agency

This means that each partner acts on behalf of the partnership when engaging in partnership business. i.e. The act of any partner is binding on all other partners.

1. Joint Property Interest

This is a situation whereby each joint venturers participant contributes property, cash, or other assets and organizational capital for the pursuit of a common and specific business purpose. Thus, an IJV is not merely a contractual relationship, but rather the contributions are made to a newly formed business enterprise, usually a corporation, limited liability company, or partnership.

1. Due diligence

Due diligence is the investigation of a country, business or person, for the purpose of obtaining useful information on the potential benefits, pitfalls and costs. It helps investors to make better profit and mitigate risk.

8. Limited liability

This allows to limit debts and losses to the assets of the venture and protect the assets of the members themselves from being liable for the venture's debts.i.e. the partners have limited liability and can be held liable only to the extent of their capital investments.

9. Co-venturers

co-venturers": this is a situation when two or more persons come together to form a temporary partnership for the purpose of carrying out a particular project, such partnership can also be called a joint venture where the parties are "co-venturers"