Articles of Association are regulations for internal management of the company. JOINT VENTURE AGREEMENT This Joint Venture Agreement (this “Agreement”) is entered into as of the _____, ... including any required ... document. © Copyright 2016, All Rights Reserved. Joint Venture (“JV”) is one of the most interesting kinds of business arrangement, where two or more parties come together and pool their resources in order to accomplish a specific task. A JV is a very lucrative arrangement as it offers an enormous amount of benefits by which the parties to the JV could gain. The following are some of the most significant clauses that are to be required to be carefully incorporated into the definitive agreements: In case the JV is being structured as a separate legal entity in form of a company, then MoA and AoA also become significant documents that , apart from SHA/JV Agreement, that needs to be drafted. The type of agreement you will enter into will depend upon the kind of structure that you choose to go ahead with: Following table explains the different definite agreements which are required to be entered into as per your chosen structure: TYPE OF DEFINITIVE AGREEMENT REQUIRED FOR DIFFERENT STRUCTURES IN A JV, Strategic Alliance Agreement or Cooperation Agreement. This could be achieved by effecting a Business Transfer Agreement (BTA). Therefore, the parties to the JV should ensure that the current main objects of the company are vide enough to cover the proposed activity of the JV Company. The definitive agreements necessarily require incorporation of all the relevant clauses which would specify the mutual understanding arrived at between both parties as to the formation & conduct of the JV, rights and obligations of the parties and dispute resolution mechanism. It provides the companies to penetrate into a new market, wherein it was previously restricted due to shortage of funds, technology or prohibitory regulatory framework. Following are a few example of such clases: When two parties, especially two big firms join hands for a JV, a lot of confidential information regarding each other and their companies is often involved in the process. The parties undertake to provide money or other resources as their contribution to the assets or other capital of that legal entity. | Powered by. Having that said, in most cases Company and Strategic Alliance are the most sought after structures. A partnership JV are unincorporated forms of JV which represent the business relationship between the parties with a profit motive. A partnership firm is created under the Partnership Act, 1932, and is in many respects simpler than a company in terms of formation and compliances. The emphasis of MoU lies in the fact that it will be the basis of the further definitive agreements. JVs are thus highly flexible and floated structures depending upon the considerations and objectives of the participants. Any act of the company beyond the scope of MoA will be an ultra vires act, which will have serious consequences. Under License Agreement, the licensor maintains his rights and interest in the IP. Essentially definitive agreement sets out the mutual rights and obligations of parties in respect to the JV, and it also states the manner in which the parties will conduct themselves in operating and managing the JV. Where the principal place of business is located 1. The company will survive as the same entity despite a change in its ownership. This document is a template for a Joint Venture Agreement between two businesses. And what is its essence? They may be broad based or narrowly defined and the main classification of JVs is as corporate JV and contractual JV. Following are some of the Agreements by which the business/assets/IP is transferred: The partners to the JV may be contributing in terms of some tangible assets like plant, machinery, land, equipment etc (“Asset Sale”), or might even decide to transfer the whole of their business unit to the newly formed JV at a going concern basis along with all the licenses, grants and authorization (“Slump Sale”). How much would be the stake of each partner to the JV? Much more compliance than a Partnership Firm. This arrangement can also be termed as Corporate JV. The article further discusses all the documents that are required to be drafted for each of such structures for the Joint Venture. The contribution of IP assets to the joint venture may be in the form of an assignment or a license. The most simple form of JV is to conclude a purely contractual arrangement like a cooperation agreement or a strategic alliance wherein the parties agree to collaborate as independent companies rather than forming a separate entity. , which states their duties and lays down a road map for the future. This agreement can be entered into in a short duration project involving a limited activity or where JV is for a limited term. This arrangement can also be termed as Corporate JV. There is hardly any requirement of compliance; The documentations required are very less; There are significant tax issues if it is not structured properly; Independence might make some parties less motivated to contribute. A JV is a very lucrative arrangement as it offers an enormous amount of benefits by which the parties to the JV could gain. The LLP has the basic features of a corporation including separate legal identity.

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