A joint venture (JV) agreement is filed by a group of people or companies to venture into partnership over a venture or a project, without it affecting their respective legal status. The Joint Development Agreement legally binds both parties, and defines the scope of mutual effort, disparity, and facilitates provisions for sharing the gains and enterprising operations. Generally, an MoU (Memorandum of Understanding) is created between the parties involved, before getting into a joint development agreement.
Benefits of a Joint Venture Agreement
Minimal Liability: A Joint Venture Agreement permits a business to work with another entity while functioning as an individual legal identity. Hence, it is a minimum liability alternative for businesses in which 100% of FDI has been employed.
Gateway To New Avenues: A Joint Venture Agreement allows you to access new markets and resources and ensures that the risk is shared, without any of the disadvantages involved in operating as a single entity.
Checklist For A Joint Venture Agreement
- Two or more parties have the intention of entering into a partnership or starting a venture.
- Each party invests in the venture equally or as per agreement.
- Accordingly, each party is assigned duties and rights with respect to the partnership.
- The partnership or the venture is defined by the terms of the agreement, including the period of the agreement, and share of each party.
What Are The Components Of A Joint Venture Agreement
- Applicable law;
- Shareholding pattern;
- Composition of board of directors;
- Management Committee;
- Frequency of board meetings and its venue;
- General meeting and its venue;
- Composition of a quorum for important decision at board meeting;
- Transfer of shares;
- Dividend policy;
- Employment of funds in cash or kind;
- Change of control;
- Restriction/prohibition on assignment;
- Non-compete parameters;
- Break of deadlock;
- Jurisdiction for resolution of dispute; and,
- Termination criteria and notice.
How Can We Help With The Joint Venture Agreement Process
2-4 Business Days: It begins with the request to prepare a Joint Venture Agreement. The requisite details are collected from the client. Our in-house lawyers and legal experts create the Joint Venture Agreement and send it across to the client for verification, within 2- 4 business days.
2 Rounds of Iterations: When drafting a Joint Venture Agreement, two rounds of iterations are included in the original price of preparing the contract. Once these changes are made the Joint Venture Agreement will be sent to the client for verification.
Documents Required For A Joint Venture Agreement
- All documents related to the venture agreement shall bear the name of the joint venture.
- All documents prepared by either of the members, related to the venture or project that reflects the performance of activities completed under the contract.
- Copyrights (if any) granted to a member of the agreement by another member to reproduce similar work.
- Documents that indemnify its members against claims, liabilities, damages, costs, and expenses sustained as a result of reusing the designs, drawings as part of a project or other projects, under the venture.