A Joint Venture (JV) agreement is filed by a group of people or companies to partner over a venture or a project, without affecting their own legal status. The JV Agreement binds both parties, defines the scope of relations, and facilitates provisions, such as money, properties, and other assets, each entity will bring to the venture. The contract also establishes how the venture will be managed and how control of it—and profits and losses from it—will be divided. A joint venture might involve two companies with different areas of expertise working together to create a new product or provide a new service. Or a company looking to break into a new geographical market might form a joint venture with a company that is based in or has an established presence in the country or region.
Participating entities Documents:
Joint Venture details:
If the joint venture is its own separate business entity, it will pay its own income taxes according to the form of business—such as a partnership—it was created as. If it's an unincorporated joint venture, any profits must be accounted for by the entities who signed the JV agreement.
Yes, a 'joint venture' is recognised as a distinct legal concept in India. As per the provisions of the Companies Act 2013, a joint venture is defined as a joint arrangement, whereby the parties that have joint control of the arrangement have the rights to its net assets.
A Joint Venture Agreement allows you to access new markets and resources and ensures that the risk is shared, without any of the disadvantages involved in operating as a single entity.
You can decide to pay each partner a base salary and then split any remaining profits equally, or assign a percentage based on the time and resources each person contributes to the company. Keep in mind that a 50-50 partnership legally requires one partner to receive the approval of the other.
The joint venture may or may not result in the formation of a new business entity. A joint venture is a cooperate arrangement that is intended to benefit two or more separate business entities.