Das Feller-Forum » he joint venture agreement

The term Joint venture derives its origin from two different words i.e. joint which means combined and venture which means undertaking a risk. So Cheap Jerseys China , in a layman’s language, it means undertaking a risky task or business together. Coming to the technical meaning of joint venture that is used in the corporate world, JV means an incorporated contractual business agreement between two or more parties that has been formed by contribution of equity by the parties. This is a kind of contract arrangement. In a JV agreement Cheap Jerseys , the parties not only bear the risks together but they share the profits also. Generally, joint venture agreements are for a finite period of time. Anyone (legal person as well as natural person) can be a party to a JV agreement for e.g. individuals, government Cheap NCAA College Jerseys , private companies. There are various types of joint venture agreements for e.g. joint venture can be for a specific goal or joint venture for a specific time period. Also, a joint venture agreement can be entered into in any form for e.g. in the form of a LLP or partnerships etc with the requirement being there should be two or more than two parties to the agreement.


The joint venture agreement which is entered into for a specific purpose is generally referred to as consortium. The best example of this of this can be the consortium formed by upstream oil companies at the time of bidding sessions of NELP. There are various reasons for a company to prefer a joint venture agreement before going for undertaking big projects. JVs are generally entered into for high profit and high risk businesses. For e.g. going for exploration of an oil block obtained after bidding involves a lots of capital investment as well as latest technological know high and there is always a high risk of not getting oil in the block and income from the block starts only after oil is discovered in the block otherwise all the losses have to be borne by the investor alone. Therefore before bidding for the block, several oil companies form a consortium and sign a memorandum of understanding and then together go for final bidding. Another reason for entering into a joint venture agreement is FDI. In 1991 Cheap Sports NCAA Jerseys , Indian economy was liberalized and foreign investment was allowed and now in most of the sectors foreign investment up to 100% is allowed except some sectors where it is not at all allowed (nuclear sector, agriculture sector) or where prior permission from govt. is required. In such a situation although fiscal incentives succeeded to attract foreign players to the domestic market but their unawareness about the regulatory and policy framework of India compelled them to enter into JVs with Domestic players for a better understanding of the domestic market as well as structural and regulatory framework of the country. This also benefitted them as they did not have to struggle much for the customers as the customers of the domestic players automatically became their customers.