FEATURES OF JOINT VENTURE AGREEMENT

Selection of good local partner is the key to the success of any joint venture. A joint venture agreement requires dexterous legal drafting and should incorporate clearly the relevant clause that specifies the mutual understanding arrived at between both parties as to the formation, registration and operation of the joint venture company. A brief checklist of important clause is as follow:

i) Name of the parties of Joint Venture

ii) Place of execution of agreement

iii) The proportion of shareholding pattern in the Joint Venture

iv) Specify nature of shares

v) Composition of Board of Directors, appointment and changes in chairman, Quorum of meeting, casting vote provision in Board Meeting.

vi) Appointment of CEO / CFO

vii) General Meeting provision

viii) Appointment of Management Committee

ix) Dividend Policy

x) Funding Provision

xi) Access Condition

xii) Change of Control / Exit Clause

xiii) Anti Compete Clause

xiv) Maintaining Confidentiality

xv) Indemnity Clause

xvi) Applicable Law

xvii) Force Majeure

xviii) Termination of Agreement

It is sincerely hoped that this Article will give a bird’s eye view of the concept of joint venture in India and will help the parties desirous of entering into the same in many ways.

—The author is Founding and Managing Partner of Anand Law Practice. He can be reached at Kamalkanand@anandlawpractice.com