JOINT VENTURE

1. What is Joint Venture?

A Joint Venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it. However, the venture is its own entity, separate and apart from the participants' other business interests.
The venture can be for one specific project only. The JV is dissolved when that goal is reached.
A JV can be brought about in the following major ways:
Equity-based joint ventures benefit foreign and/or local private interests, groups of interests, or members of the general public. Under non-equity joint ventures (also known as cooperative agreements), meanwhile, the parties seek technical service arrangements, franchise and brand use agreements, management contracts, rental agreements, or one-time contracts, e.g., for construction projects. Participants do not always furnish capital as part of their joint venture commitments. There are, for example, non-equity arrangements in which some companies are more in need of technical services or technological expertise than they are capital.

  • Foreign investor buying an interest in a local company
  • Local firm acquiring an interest in an existing foreign firm
  • Both the foreign and local entrepreneurs jointly forming a new enterprise
  • Together with public capital and/or bank debt

JV companies are the preferred form of corporate investment but there are no separate laws for joint ventures. Companies which are incorporated in India are treated on par as domestic companies.
Why it is needed- 1. More resources: since two or more firms join together to form a joint venture, there is availability of increased capital and other resources.
2. Access to new markets: by engaging with a foreign collaborator, the products and services can be marketed in a foreign country. 
3. New and improved Technology: One partner may have the new and improved technology but do not have the resources. Other partner may have resources like capital but do not have the technology. In such causes joint venture can fetch new and improved technology as well as great resources. By engaging a foreign partner, improved foreign technology can be availed from it's foreign collaborator.
4. Use of existing marketing arrangements or existing distribution network of one of the party is possible.
5. Access to improved resources like experienced technicians, experienced staff, greater capacity, financial resources etc. are possible through joint venture business.
6. Sharing of costs and risks with partners.
7. Diversification of business by producing new products or new area of business.
8. Increased productivity and grater profits.
9. Exchange of Products: Joint venture companies can offer their existing product to sell through the partners network and share the profit. Both JV partners can do the same. By exchanging products and services of the partner, they can diversify the product basket and sell it to their existing customers and increase the profit.

2. Requirements for Commencing Joint Venture?

1. Drafting of Joint Venture Agreement- A Agreement regarding all the arrangements made between the parties shall be drafted by us covering all the legal aspects.
2. Nature of JV- Other Requirements will depend on the nature of JV whether it is Equity based, non-equity or some other kind of arrangement.   

3. Documents Required?

1. Copy of address proof of parties to JV.
2. Copy of PAN card of parties to JV.
3. Copy of memorandum of company (In case of Company)
4. Copy of Partnership Deed (In case of Partnership Firm).
5. Other Documents requirements varies case to case basis.

4.Time Required for Agreement Drafting?

Baxicorporate will get the Agreement Drafted within 7 working days.

5. Pricing ?

For Pricing and other details Click  

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