A joint venture in India is a contractual business arrangement between parties for a specific transaction and limited duration, unlike long-term partnerships. There are two main types of joint ventures: incorporated and unincorporated, with various funding options available and significant regulatory oversight. Key considerations include joint venture agreements, governance, intellectual property rights, and exit strategies for the parties involved.

2. Joint Ventures in India
Key Considerations

3. Table of Contents
• Meaning
• Types
• Funding
• Role of Regulator
• Joint Venture Agreement
• Intellectual Property
• Exit

4. Meaning
A joint venture is a contractual business undertaking between two or
more parties
It is similar to a business partnership, with one key difference -
• a partnership generally involves a long-term business relationship
i.e. going-concern
• whereas a joint venture is based on a single business transaction for
a definite period

5. Types
Joint ventures can broadly be classified into two broad categories:
Incorporated joint ventures Unincorporated joint ventures.
Joint ventures by their very nature provide a lot of flexibility to the
parties in terms of structuring

6. Funding Sources for JV Parties?

7. Joint Venture
Indian Investor Foreign Investor
FDI
(Equity)
DCF valuation
ECB
(Debt)
LIBOR + 500 basis
points for a 5 year loan,
Funding

8. Role of Regulator
Regulator Role
Reserve Bank of India (“RBI”)
Ministry of Finance
SEBI
CBDT
Primary authority to regulate capital
flows
Foreign Investment Promotion
Board (“FIPB”)
Approves FDI
Department of Industrial Policy and
Promotion (“DIPP”)
Responsible for promulgating policy
on FDI into the country

9. Joint Venture Agreement
Governance and Management
• Board of Directors
• Key Managerial Personnel
• Establishment of working offices
Restrictions on transfer of shares / Lock – in
Roles and Responsibilities of Parties
Affirmative Vote Matters / Veto Rights
Deadlock
• Buy – sell
• Third party expert
• Resolution committee

10. Intellectual Property
When two parties get together to form a joint venture is the brand name to be formed and
the ownership of the same
Once a joint venture company is formed, the ownership and protection of intellectual
property that the joint venture company creates is usually of prime significance
The contribution by a joint venture partners may also in the form of intellectual property.
Joint venture entity continue to use the trademark

12. Exit
Natural expiry in cases where the joint venture was established for a specific
purpose
Mutual consent
IPO
Breach
Transfer of shares by one partner to the other partner or to a third party