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The type of joint venture
Venture details, such as its name, address, purpose, etc.
Start and end date of the joint venture
Venture members and their capital contributions
Member duties and obligations
Meeting and voting details
Management, dissolution, and assignment of interest details
Non-compete, confidentiality, and dispute resolution clauses
Forming a Joint Venture with an ideal business partner provides a fast way to influence complementary resources that are available with the other partner, share each other’s skills, access new market or diversify into new business. There are disadvantages when it comes to Indian global expansion where the Indian Companies find it had to achieve the expectation in the global market in terms of:
The management process.
These difficulties can be superseded by way of an alliance with a foreign counterpart who is a strategic fit. The alliance between those possessing varying expertise and capabilities in technology, marketing and distribution etc., are necessary to encounter the growing needs of modern business.
A Joint Venture Agreement is an agreement between you and your partners that sets out the duties and obligations of the partners to each other and to the joint venture. Your Joint Venture Agreement does not have to be filed or registered.
Select the state in which the joint venture will primarily do business. The laws of the state you select will be used to develop this agreement.
The people contributing the assets to the Joint Venture, or JV, will all be parties to the Joint Venture Agreement.
Usually, Yes so that shareholders can enforce against the company
There are many examples of collaborations between businesses – common ones are the following structures where two or more people share resources and risk:
Usually the JV parties form a separate limited company for the Joint Venture so each has limited liability (up to amount of share capital invested) should the Joint Venture not work and become insolvent.
However the tax position must be assessed to start with because transferring significant assets into the Joint Venture can have unwanted tax consequences. You should check with your tax advisers. Sometimes a partnership or a limited liability partnership is used instead.
If you do not require management involvement in the Joint Venture, it may be best to use contractual arrangements rather than to create a separate Joint Venture entity. For example, a designer could simply license his or her intellectual property rights in the design to another business to exploit in return for royalty payments.
You should identify what other agreements are needed between the Joint Venture and the shareholders – e.g. licenses to use software, brand names, premises, secondment of staff etc?