BN Ltd. and PL Ltd. desire to form a Joint Venture for setting-up a new infrastructure project in the State of Karnataka. Both the companies approach you to seek your advice on the Joint Venture Agreement to be entered i

Essential components of a Joint Venture (JV) Agreement In India, there is no legally prescribed format for a Joint Venture Agreement. However, in actual practice, the Agreement contains the following components: Description (Nature of the Agreement) Parties (full description of the parties to the Agreement) Recitals (states the situation as it existed prior to the execution of this Agreement; it is also used to convey the intention of the parties) Operative Part (defines the rules for the future; typically consists of the name and constitution of the new entity being set up, equity investments, rules relating to loans by either party, activities to be undertaken, the role of each party, the constitution of the Board, names of the Chairman and Managing Director and their powers, duties, etc., matters to be decided by consensus, managerial remuneration, milestones to be reached, and a plan of action) Legal aspects: Amendments of the JV Agreement Duration of the JV Termination Dispute resolution by amicable consultation and/or Arbitration mechanism/Alternate form of Dispute Resolution. Courts of a particular State (in India) or Country (where the JV partner is a foreign entity) that will have jurisdiction in the event of a dispute Confidentiality and Non-Disclosure Agreement Non-compete clause Indemnification Procedure for execution.