Joint Venture Agreement
What is Joint Venture?
A joint venture is basically a tactical partnership in which two or more than two companies or individuals decides to put in products, services and capital to establish a commercial project.
The main key for success in joint venture in India is the compatibility and understanding between the contracting parties.
The associated parties must aim for a goal together and the conditions must be written in the clauses of Joint Venture Agreement. This can maintain the success of the collaboration in Indian scenario.
Checklist for a Joint Venture Agreement
- Two or more parties must have the intension of getting involved in a partnership or a venture.
- Both the parties invest in the venture or according to the agreement.
- Each party is assigned with duties and rights as per the partnership.
- The terms of the agreement define the venture or the partnership that includes the agreement span and the share of the parties.
Types of Joint Ventures
The two options available for establishing a joint venture in India are:
- Contractual joint venture
- Equity based joint venture
Benefits of a Joint Venture
- New insights and expertise
- Better resources
- It is only temporary
- Both parties share the risks and costs
- Joint ventures can be flexible
- There are ways to exit a joint venture
- You will know what’s yours and will be able to sell it
- You are more likely to succeed
- You will build relationships and networks
- Your potential will virtually be limitless
- You get to save money by sharing advertising and marketing costs
- International joint venture eradicates the risk of discrimination.