Joint Venture Agreement

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What is a Joint Venture Agreement?

A joint venture agreement is a business contract between two companies or individuals who agree to work together to achieve certain goals.

Joint Venture types in India

1. Equity joint ventures.

In this venture one company buy the materials of another company and invest in its equity by making a joint venture company. A third company can be created by two companies with equal distribution in a fixed ratio. In this case, stock agreement should be lamented about the pattern of shareholding Board of directors, policy of dividend, policy on share transfer and control of change.

2. Partnership form of Joint Venture.

For a joint venture LLP can be created under the LLP act. For this minimum two partner are needed in which once partner should be Indian resident. In this case the following essential points should be lamented in the agreement;

Legal relationship duration, profit sharing losses sharing, each partner rights and obligations and Partnership Dissolution.

3.Contractual Joint Venture

Two company's may come together under an agreement to achieve a particular task. In this case contractual agreement decides each partners company's rights and duties. Also points how the joint venture may come to an end.

Advantages of Joint Venture Agreement

Listed below are the top advantages of a joint venture Agreements;

  • Reducing costs

    Partnership with an active business gives you beneficial links - office space, suppliers access and distribution networks.

  • Ranging in a new market.

    A joint venture for Indian companies with a local company will help them to adjust to a new country quickly. For foreign brands in India partner can give beneficial insights on market awareness

  • Legal Constraints.

    In India foreign establishment may not allow to invest in particular sectors or industries. In this case a joint venture with an Indian establishment can be the only way to get round.

  • Distribution of assets human resources and intellectual property.

    A joint venture is an elementary to unbolt vital resources like patents, marketing tools or manufacturing technology.

Recent Updates

Indian Multinational Giant Tech Mahindra Enters Into Joint Agreement with Japan-based Fortune 500 Corporation, Sumitomo

October 16 2020

Under the joint venture agreement, Tech Mahindra and Sumitomo will set up a new company providing engineering services to the automotive industry. The services will be provided to customers in Japan as per the terms of the agreement.

First Joint Venture Hydro-electric Project between India and Bhutan

29-June-2020: The Concession Agreement for a 600 MW Hydroelectric Project was signed between the Bhutan government and Kholongchhu Hydro Energy Limited today. Kholongchhu is a Joint Venture company formed between Druk Green Power Corporation (DGPC) of Bhutan and Satluj Jal Vidyut Nigam Limited (SJVNL) of India.

Sam India-Gulermak Joint Venture Bags Civil Contract of Delhi Metro Phase IV

03-June-2020: The Sam India - Joint Venture has bagged the Rs 766 Crore civil contract of phase 4 of the Delhi Metro project today. KEC International Ltd-Longjian joint venture, the other bidder, lost out on technical grounds.

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