The document discusses joint ventures, including their definition, types, reasons for forming them, agreements, benefits and risks, problems, and examples. A joint venture is formed between two or more parties to undertake economic activity together for a specific project or ongoing business relationship. Reasons for joint ventures include building on strengths, risk sharing, accessing new markets or technologies. The document outlines different types of joint ventures and important issues that should be addressed in a joint venture agreement.

1. What is the most Similar thing to a Joint Venture?

2. It’s Marriage

3. Joint Ventures Abroad Presented by: Jigar Mehta, Rahul Sharma, Omkar Borle and Pavan Singh.

4. Contents Joint Venture Definition & Overview 1 Reasons to form Joint Ventures 2 Types of Joint Ventures 3 Joint Venture Agreement 4 5 6 7 8 9 10 Government Policies Problems in a Joint Venture Benefits & Risks in a Joint Venture Secrets of a successful Joint Venture Ending a Joint Venture Examples of JV

5. Definition & Overview A joint venture (often abbreviated JV) is an entity formed between two or more parties to undertake economic activity together. The venture can be for one specific project only, or a continuing business relationship. It belongs to the family of alliances – strategic and non strategic. Strategic alliances being characterized by the fact that they gather competitor companies.

6. Overview A typical International Joint Venture is between: Two international parties, (individuals or companies), incorporate a company. The above two parties subscribe to the shares of the joint venture company in agreed proportion, in cash, and start a new business.

7. Promoter shareholder of an existing company and a third party, who/which may be individual/company, one of them non-resident or both residents, collaborate to jointly carry on the business of that company and its shares are taken by the said third party through payment in cash.

8. When is joint venture used. Joint ventures are common in the oil and gas industry. To Enter a new or existing market. Technology transfer. Government regulations.

9. Reasons to form JV Internal reasons Build on company's strengths Spreading costs and risks Improving access to financial resources Economies of scale and advantages of size Access to new technologies and customers Access to innovative managerial practices

10. Reasons to form JV Competitive goals Influencing structural evolution of the industry Defensive response to blurring industry boundaries Creation of stronger competitive units Speed to market Improved agility

11. Reasons to form JV Strategic goals Synergies Transfer of technology/skills Diversification

12. Types of JV Co-operate with another business in a limited and specific way Separate joint venture business Business partnership or a limited liability partnership

13. JV Agreement A written agreement should cover: the structure of the joint venture, e.g. whether it will be a separate business in its own right the objectives of the joint venture the financial contributions you will each make whether you will transfer any assets or employees to the joint venture ownership of intellectual property created by the joint venture management and control, e.g. respective responsibilities and processes to be followed

14. JV Agreement how liabilities, profits and losses are shared how any disputes between the partners will be resolved an exit strategy

15. Government Polices and Opportunities The following requirements will have to be complied with for setting up joint ventures abroad Companies Act FERA.- Section 27 of Foreign Exchange Regulation Act, 1973. Approval of Reserve bank.- For sending representatives Remittance of cash

16. Government Polices and Opportunities Holding shares and securities abroad Tax concessions under Income-tax Act Deduction of 50% of royalties, commission, etc., received from foreign enterprises

17. Problems in a JV Valuation problems. Transparency Conflict resolution Ownership and management Control problems Changes in ownership shares Marketing and staffing issues Problems related to multinationality.

18. Problems in a JV Export rights Tax issues. Dividend and investment policies. Differences in partner size. There may be other control problems: Product line disputes Material and component sourcing Technology utilization Cultural problems.

19. Joint Venture Benefits A successful joint venture can offer: Access to new markets and distribution networks Increased capacity Sharing of risks with a partner Access to greater resources, including specialized staff and Technology A joint venture can also be very flexible Popular with transport and travel industries that operate in different countries.

20. Joint Venture risks Problems are likely to arise if: the objectives of the venture are not 100 per cent clear and communicated to everyone involved the partners have different objectives for the joint venture

21. there is an imbalance in levels of expertise, investment or assets brought into the venture by the different partners different cultures and management styles result in poor integration and co-operation the partners don't provide sufficient leadership and support in the early stages

22. Ending a Joint Venture

23. Ending a JV A contractual joint venture, such as a distribution agreement, can include termination conditions. The company can give a time periods notice to terminate the JV One company can buy out the other.

24. Ending a JV The original agreement should also set out what will happen when the joint venture comes to an end. how shared intellectual property will be unbundled how confidential information will continue to be protected who will be entitled to any future income arising from the joint venture's activities who will be responsible for any continuing liabilities, e.g. debts and guarantees given to customers

25. Understanding cultural backgrounds of all the countries involved Negotiating win-win contract Having Comprehensive Joint Venture Agreements which lays down a road map of duties and obligations of all the parties involved Having a workable and efficient Dispute Resolution Mechanism Secrets of a Successful Joint Venture

26. Involving lawyers from all the jurisdictions early on Giving leeway for international contingencies and environment. Understanding legal and regulatory regime of all the jurisdictions involved Termination Terms and Conditions Secrets of a Successful Joint Venture

27. Examples of JV The Bharti - Wal-Mart Retail Joint Venture. Lee Cooper Joint Ventures With Pantaloon Retail (India) to market Lee Cooper's denim apparel in India. Fossil in 50:50 joint venture with Rajesh Exports

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