This document can be used to legally form a joint venture between two or more parties who would like to undertake a new project, start a new service, or do some other type of specific work together in order to make a profit. It acts as a legally binding contract, to reflect the intention of all parties to establish a joint venture on the terms set out within.
The goal of a Joint Venture Agreement is to establish a new business entity or project, wherein each party shares in the profits, losses, and control of the venture. It is commonly used for large-scale projects that require significant resources, expertise or funding that a single person or entity cannot manage.
No, it is not mandatory. However, having a written agreement provides clear terms and conditions, reduces misunderstandings and offers legal protection for all the parties in case of any disputes.
A Joint Venture is a temporary or ongoing business arrangement where two or more individuals or entities come together to pursue a specific objective. Each party contributes resources and shares the profit and loss in a particular ratio.
A Joint Venture Agreement must contain the following clauses:
Any person above the age of 18 years or entity registered in India can enter into a Joint Venture Agreement.
There is no fixed duration for a Joint Venture Agreement. It can be for a fixed period, completion of a certain project or until terminated by either party.
Once the Joint Venture Agreement has been completed, and if it is a binding document, it must be printed on non-judicial stamp paper or e-stamp paper and signed by all the parties to the Joint Venture Agreement and dated. The value of the stamp paper would depend on the state in which it is executed. Each state in India has provisions in respect of the amount of stamp duty payable on such agreements. Information regarding the stamp duty payable can be found on the State government websites. Each Party signing party then keep a copy of the Joint Venture Agreement for their own reference.
It should be noted that further actions should be taken to create the entity that shall be the basis of the joint venture. For instance, if the joint venture is to take the form of a limited company, such a company will need to be incorporated and registered. If the joint venture is a partnership, the parties should enter into a Partnership Deed instead. If the joint venture is a limited liability partnership, the parties should enter into a Limited Liability Partnership Agreement instead.
No, it is not mandatory. However, two adult witnesses above the age of 18 years will add a layer of protection to the Joint Venture Agreement in case of any disputes in the future.
Joint Venture Agreements in India are subject to the Indian Contract Act, 1872, general contract principles as well as laws protecting intellectual property rights such as the Copyrights Act, 1957 and Trademarks Act, 1999.
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Joint Venture Agreement - Template - Word & PDF