joint-venture-agreement

JOINT VENTURE AGREEMENT

DEFINITION

A joint venture (JV) agreement is executed by a group of people or companies/organizations that want to venture into partnership over a venture or a project. Such an agreement does not affect their respective legal status. A joint venture agreement is legally binding on both parties. It clearly defines the scope of shared effort/disparity/and facilitates ways to share the profits and enterprise operations. The first step is the creation of a Memorandum of Understanding (MOU) between the parties involved. After that is done and agreed upon a joint venture agreement is created.

ADVANTAGES OF A JOINT VENTURE AGREEMENT

  1. MINIMUM LIABILITY: A joint venture agreement allows a company/organization to work with another company/organizations, while still functioning as an individual legal entity. Thus, it is a minimum liability alternative for any company/organization where 100% FDI has been employed
  2. ACCESS TO NEW MARKETS: A joint venture agreement allows a company/organization to access new markets and resources. It also helps both parties involved to ensure that the risk is shared. It negates the known disadvantages that are usually involved for a company when it operates as a single entity

CHECKLIST FOR A JOINT VENTURE AGREEMENT

  • Two or more parties must have the desire of getting into a partnership or starting a joint venture
  • Each party’s investment in the joint venture is equal, or as per the terms agreed upon in the agreement
  • Each party is given duties and rights in regards to the joint venture
  • The partnership or the venture is governed by the terms of the agreement. These terms include the timeline of the agreement and share of each concerned party

SECTIONS OF A JOINT VENTURE AGREEMENT

  • The applicable law of the land
  • The shareholding pattern of the joint venture
  • The composition of the board of directors
  • The management Committee of the joint venture company
  • The frequency of board meetings, and the venue where such meeting will be held
  • The general meeting and the venue where it will be held
  • The composition of a quorum for important decisions at board meetings
  • The transfer of shares terms and conditions
  • The Dividend policy of the joint venture
  • How funds in cash or kind will be employed in the company
  • The change of control in the company
  • Restrictions/prohibitions on assignment
  • The non-compete parameters
  • The confidentiality clause
  • The indemnity clause
  • The terms decided for break of deadlock
  • The Jurisdiction for resolution of dispute
  • The termination criteria and notice

Once you get in touch with us at ACE ALLIANCE with your request to create a joint venture agreement, we will start the process. After our team receives all the details, our expert team of lawyers and attorney will create the joint venture agreement sample and send it across for your reference within 2- 3 business days. The price you pay for these services will includes three rounds of iterations. Therefore, if you need any changes done to the joint venture agreement format, our team of lawyers at ACE ALLIANCE will do the needful.