Two parties form a joint venture company in India. One party transfers its business to the company and receives shares in return. The other party subscribes to shares in the company by paying cash. A joint venture can be domestic, between partners of the same nationality, or international, between partners of different nationalities. Key clauses in a joint venture agreement address shareholding proportions, board composition, decision making, funding, confidentiality, dispute resolution, and termination.

1. Joint Venture
Two parties, (individuals or companies),
incorporate a company in India. Business of one
party is transferred to the company and as
consideration for such transfer, shares are
issued by the company and subscribed by that
party. The other party subscribes for the shares
in cash.

2. Types of Joint Venture
• Domestic Joint Venture
• International Joint Venture

3. Domestic Joint Ventrue
• The Domestic Joint Venture
means all partners with the
same nationality.

4. International Joint
Venture
• The international Joint Venture
set up by partners of different
nationalities.

5. Advantage of Joint
Venture
• Accessing additional financial
resources
• Sharing the economic risk with co-
venturer
• Widening economic scope fast
• Tapping newer methods, technology,
and approach you do not have
• Building relationship with vital
contacts

6. Disadvantage of Joint
Venture
• Shared profit
• Diminished control over some
important matters
• Undesired outcome of the
quality of the product or project
• Uncontrolled or unmonitored
increase in the operating cost

7. Important Clause of
Joint Venture
• The proportion of shareholding in the joint venture company
• Specify nature of shares, indicate their transferability conditions.
• Composition of the Board of Directors, Appointment of Chairman ,Quorum of Board
meetings ,Casting vote provisions.
• General meeting.
• Appointment of CEO/MD.
• Appointment of Management Committee
• Important decisions with mutual consent of partners
• Dividend policy
• Funding provisions
• Access conditions.
• Change of control/exit clauses.
• Anti-compete clauses
• Maintaining Confidentiality
• Indemnity clauses.
• Assignment.
• Break of deadlock.
• Dispute Resolution
• Applicable law.
• Force Majeure.
• Termination provisions.