A consortium of companies is quite a popular type of cooperation between companies, which they reach for large and complex projects, such as tenders or investments. Although a consortium does not have a separate legal personality, it can nevertheless be an effective tool when it comes to achieving economic goals – provided that a consortium agreement is properly prepared. Check below how to do it.
Table of Contents
- What Is a Consortium of Companies?
- Legal Form of a Consortium – Does It Exist?
- What Does a Good Consortium Agreement Look Like?
- Advantages of Forming a Consortium
- When Is It Worth Forming a Consortium?
- Consortium of Companies – Summary
- Frequently Asked Questions About the Consortium of Companies
What Is a Consortium of Companies?
A consortium of companies is a partnership between at least two businesses. They join forces to carry out a common project. In practice, this often includes participating in public tenders, construction investments, major IT projects, or comprehensive service delivery.
It is important that the consortium:
- does not create a new legal entity,
- does not require registration in the National Court Register,
- is based solely on a civil law contract between the participants.
Legal Form of a Consortium – Does It Exist?
Example: Company A and Company B from different industries want to execute a road investment. They form a consortium through an agreement without creating a new company.
Although people often refer to the “legal form of a consortium”, in reality, a consortium has no specific legal form under the Commercial Companies Code. It is neither a company nor a foundation. It is simply an unnamed contract, meaning one that is not directly regulated by any specific act.
The functioning of a consortium is based on:
- Compliance with civil law regulations,
- Adherence to principles of social coexistence,
- Proper definition of the scope of activity and responsibilities of the parties.
What Does a Good Consortium Agreement Look Like?
A solid consortium agreement is essential for effective and secure consortium operation. It should define in detail the rules of cooperation, liabilities, and duration of the agreement.
What is important, a consortium agreement does not require a specific form. Even a simple written form is sufficient. However, remember that lack of an authorised signature can invalidate the consortium agreement.
Key elements to include in a consortium agreement:
| Element | Description |
| Parties to the contract | Full details of participants, e.g. tax ID, registration number, company address, authorised representatives |
| Purpose of the consortium | Clear definition of the common project (e.g. participating in a tender) |
| Scope of participation | Who is responsible for what, profit sharing, cost-bearing arrangements |
| Rules of representation | Who can sign documents on behalf of the consortium |
| Duration | A specific date or dependency on the completion of a given project |
| Joint or separate liability | Determining whether the participants are jointly or separately responsible for the implementation of the project |
Advantages of Forming a Consortium
The decision to form a consortium of companies can bring many benefits. Especially for complex projects that require different competencies and resources.
The most important advantages:
- the possibility of implementing large projects without establishing a new company,
- combining the resources and competences of different companies,
- increasing the chances of winning tenders,
- flexible form of cooperation.
Potential risks:
- lack of legal form can lead to liability problems,
- requires a high degree of mutual trust,
- experience is not transferable to newly created entities.
When Is It Worth Forming a Consortium?
A consortium is especially beneficial when:
- A single entity does not have all the required resources (equipment, experience, staff),
- A comprehensive project execution is needed, covering different fields,
- The goal is to participate in a public tender with strict formal criteria.
Example: A consortium consisting of an architecture firm, a construction company, and an installation firm jointly carries out a residential investment. Each one is responsible for its part, but works under one project.
Consortium of Companies – Summary
A consortium of companies is an effective and flexible form of cooperation on large projects. Although it does not have a specific legal form, a well-drafted agreement can provide full legal and organisational security. It is especially important to pay attention to clauses regarding liability and representation. This will help to avoid problems during the implementation of the common goal.
Are you thinking about forming a consortium? Consult an expert! Don’t risk the invalidity of the contract and misunderstandings between partners. Use the help of a lawyer who will prepare a contract for you and advise on the liability of the parties.
Frequently Asked Questions About the Consortium of Companies
1. What is a consortium of companies?
An agreement between two or more businesses to carry out a joint project..
2. Is a consortium a legal form?
No. Consortium is not a legal form – it is a civil law contract.
3. Does the consortium have to be registered in the National Court Register?
No. The consortium does not require registration.
4. What should a consortium agreement include?
Information about the parties, project purpose, responsibilities, representation rules, duration, and liability.
5. Can a consortium take part in public tenders?
Yes – this is one of the most common uses of a consortium.
6. Does the consortium form a new entity?
No – each company retains its independence.
7. Can I find a template of a consortium agreement?
Yes, but each contract must be tailored to the specific project and partners.
8. Are consortium members jointly liable?
It depends on the agreement – joint or separate liability is possible.
9. Does a consortium agreement need to be notarised?
No – a simple written form is sufficient.
10. Is it worth entering into a consortium in the implementation of EU projects?
Yes – consortia are often created to implement projects co-financed by the EU.