The Companies Act 2013 defines the expression ‘joint venture’ as a joint business arrangement through which the
parties that have joint control of the business arrangement retain and exercise their rights upon the net assets of
the business arrangement. To put it succinctly, in a joint venture two or more parties co-operate and enter into an
arrangement in order to run a business or to achieve a commercial objective. Such arrangements are formed across
sectors and are more prevalent in those which involve technology, capital investment, or technical skills.
A joint venture helps parties leverage their resources, to aid in reduction of cost individually involved, while enabling parties to combine their expertise, and initiating mutual assistance to entering foreign markets.
Evidently, joint ventures are considered as a prevalent method of combining the business expertise, industry knowledge, and personnel of two unrelated companies to pursue a common business goal. As stated above, a partnership of this kind allows the parties an opportunity to scale and maximize the use of its resources to complete a specific project while reducing the total cost along with spreading out the risk and liabilities inherent to the project.
Given the benefits of forming a joint venture, keeping regulatory compliances for joint venture and joint venture legal compliance in mind following are the prevailing kinds of joint ventures:
India is an appealing jurisdiction for the purpose establishing joint ventures as it offers strategic advantages along with lucrative commercial incentives. With a population of 1.3 billion of people, India offers an enormous consumer market for different local as well as foreign companies. Further, it offers a vast pool of available skilled and unskilled human resources across most economic sectors along with access to native produces and raw materials thereby proving cost effective and an ideal destination for doing business.
Therefore, in the last decade, foreign companies have been exploring various opportunities of forming joint ventures with Indian entities as it benefits them in obtaining the inherent advantages being offered by an existing Indian partner in terms of connection with market access and local knowledge. Further, for Indian entities it is highly lucrative to enter into a joint venture arrangement with a foreign entity, as they largely benefit from exchange of edgy technologies and management processes, enhancement of brand recognition in the foreign markets and optimum utilization of resources by having shared costs and risks.
The structure of joint ventures varies depending upon the objectives of the parties, however, it generally involves structuring of a joint venture agreement to outline the terms and conditions of the said arrangement. Therefore, it becomes very crucial to draft and review the provisions of the said joint venture agreement carefully to ensure that they are fair and equitable to all the parties involved.
As an experienced law firm, with a clear and extensive understanding of the legal and regulatory implications in both domestic and foreign jurisdictions, we are adept in delivering end to end services in relation to joint ventures to various clients. Our services include:
Years of Experience
Deal Value Handled
A&A is among the top corporate law firms in India. At A&A, we believe that we are as good as our team, Our principle has guided us to ensure that we have the best corporate lawyers in India based at our main offices while the leading corporate lawyers in other parts of the world run our various practices across the nation, thus ensuring optimum management and service of even the most complex transactions. It is due to our standards of professional responsibility when dealing with our clients and various matters, which we stringently abide by that has enabled us to qualify as one of the reputed corporate law firms in India.
Whilst A&A commercial law services has been able to cater to legal needs pan India as well as globally, its main founding office and headquarters is in Delhi and it is due to this foothold. A&A corporate lawyer in India has played a vital role in providing advice to the government on various legal and policy-related issues and is amongst the few corporate law firms in India to have the experience and optimal understanding of interpretation and drafting of policy matters.
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Joint ventures in India require multiple legal and regulatory frameworks to be taken into consideration and therefore, it is advisable to involve a joint venture lawyer in India during the initial discussions before investing time and money with a prospective business partner, as it makes the process cost-effective, ensures success probability and compliance with the applicable laws.
There is no established legal structure for joint ventures in India. Ideally, business collaborators mutually decide upon the best suited corporate structure of the company and the project based on joint venture consultancy received in India.
The terms of a joint venture arrangement can be modified subject to the terms of the joint venture agreement. Therefore, it becomes crucial to involve an experienced joint venture lawyer who ensures covering every eventuality within the joint venture agreement so that the terms of the arrangement can be modified at any stage by way of amendment documents as per the applicable laws.
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