Joint Venture Agreement

A Joint Venture is a business arrangement in which two or more parties agree to use their resources for accomplishing a specific task either a new project or any other business activity. Each participant is responsible for profit and loss, the cost associated with it. It is separated from the participant’s other business interests.

A Joint Venture is basically a kind of partnership where 2 or more than 2 companies or individuals decides to put in products, services and capital to establish a commercial project.

The main key of success in joint venture in India is the compatibility and understanding between the contracting parties.

The associated parties must have a goal together and the conditions must be written in the clauses of joint venture agreement. This can maintain the success of the collaboration in Indian aspect.

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Types of Joint Ventures

To start a joint venture in India, people can choose from the below mentioned options.

Contractual Joint venture.

Equity based Joint venture.

Elements of Joint Venture Deed

The below mentioned elements must be mentioned in the Joint Venture Agreement.

Appropriate law,

Shareholding arrangement,

Formation of board of directors,

Committee for Management,

The location and regularity of board meeting and general meeting,

How, important decisions can be taken in Board Meeting,

Share Transfer Measurements,

Profit sharing strategy,

Work of assets in real money or liquid money,

Change in Management,

Restriction/prohibition on assignment,

Non-compete parameters,

Covertness and restitution.

Benefits of Joint Venture

 New insights and expertise,

 Better resources,

 It is only temporary,

 Both parties share the risks and costs,

 Joint ventures can be flexible,

 There are ways to exit a joint venture,

 You will know what’s yours and will be able to sell it,

 You are more likely to succeed,

 You will build relationships and networks,

 Your potential will virtually be limitless,