- Lawyer Mr. Shaman Jain
- Skills Agreements
- CATEGORY Legal Documents
ABOUT THIS PRACTICE
A Joint Venture Agreement is an agreement in which two companies decide to come together for mutual benefits and to give rise to a new entity . It includes sharing of resources such as capital, personnel, physical equipment, facilities or intellectual property such as patents. Companies enter into joint ventures to expand their business, innovate new products or services or penetrate into new markets specially into international market.
Joint venture is not a legal entity, therefore, it does not require any contracts, hire employees, or have its own tax liabilities.
- Contractual joint venture: It includes two parties joining hands for a particular business project and enter into a contract having all the terms of work. The parties work as partners instead of acting as a separate legal entity thus, sharing all the profits or losses.
- Equity based joint venture: It Includes Company, Partnership Firm, LLP, Venture Capital Fund, Trusts, and Other Entities.
- It adds more skills to the skill set of a company
- It provides access to better resources like specialized staff and latest technology.
- They are flexible.
- It saves advertising and marketing costs.
- Even with a little investment one can enter into more venture deals.
- Discrimination risks are eliminated in International joint venture.
- It is a temporary arrangement between two parties.
- Getting attached to a well known brand increases your chances of success and it also improves your credibility.
Foreign companies are prohibited to enter into joint ventures in the following areas:
- Lottery Business carried on
- Gambling and Betting business
- Chit Funds
- If it’s Nidhi Company
- Trading in Transferable Development Rights
- Real Estate business or construction of farm houses
- Any Manufacture of tobacco products and substitutes
- Sectors that are not open to private sector investment e.g. Atomic Energy
- Railway Operations (it excludes permitted areas of Railway Infrastructure)
It takes around 3 to 4 working days to complete the joint venture agreement and one or two additional working days are required if any modification is demanded.