Characteristics Of A Joint Venture

I. What is a Joint Venture?

A JV is an arrangement where two or more parties co-operate in order to run a business. This has various forms, such as equity-based or contractual. It may be on a long term basis involving the running of a business in perpetuity or on a limited basis involving the realization of a particular project. It may involve an entirely new business or an existing business that is expected to benefit from the introduction of the new party. The nature of any JV will depend to a great extent on its facts, characteristics, resources & wishes of the involved parties. Overall, a JV may be summarized as a business alliance between two or more companies where the resources of both partners are mutually shared and put to use. It is an effective business strategy for enhancing marketing, positioning and client acquisition which has stood the test of time. The alliance can be a formal contractual agreement or an informal

Features of a Joint Venture

Each joint venture is different. There are however some common characteristics, which include the following:

• Joint ventures are usually one-off enterprise projects

• The parties to a joint venture manage their own finances and can gain tax advantages

• Joint venture parties remain separate legal entities

• Joint ventures are not a separate legal entity, although parties can create a company vehicle to manage the joint venture.

V. LEGAL SIGNIFICANCE OF JV

There are no express or specific regulations for JV's. However, the JV is subject to the legislation specifically regulating the particular legal form it takes and the sector it relates to.

"Corporate JV" includes both company JVs and LLP JVs. These are regulated by the:

• Companies Act 2013 (company JVs)

The Companies Act 2013 is an Act of the Parliament of India on Indian company law which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company.

• Limited Liability Partnership Act 2008 (LLP Act) (LLP