In a joint venture, the responsibilities and obligations of the partners are limited to their share, as stated in the agreement. The agreement defines the responsibility of partners to avoid litigation or confusion. In addition, in order to avoid future conflicts, the parties to the joint venture should include in the joint enterprise agreement a provision that the parties amend the MoA and AoA accordingly if the AoA is incompatible with the provisions of the joint enterprise agreement. Some joint ventures must be held in accordance with Indian accounting standards under certain conditions, including specific reporting obligations for transactions with related companies, including joint ventures. A joint venture (JV) is a tactical partnership whereby two or more individuals or companies agree to integrate goods, services and/or capital into a single business project. In a joint contractual enterprise, there is a cooperation agreement without the creation of a common unit. These contractual joint ventures may revolve around a particular theme (for example. B entry into a new market, technological cooperation and revenue distribution) and are most often found in the form of franchise agreements, licensing agreements and sales and distribution agreements. Although there are all the typical provisions in India, we have rarely seen parties referring to external mechanisms, unless they are very rare or specific, the issues related to them are specific to companies or when the impasse is not resolved after the exercise of internal mechanisms.
The parties are trying to find an internal solution, but in most cases they degenerate into formal litigation due to the breakdown of relations between the parties to the joint venture and the loss of confidence. Such blockages can often trigger the termination of a joint venture or lead to the exit of one or all parties to the joint venture, which is the subject of further debate in question 22. Finally, providing an advance on services to be provided (in the case of an information technology or information services unit in captivity) can also finance a joint venture in India. However, the parties must comply with the TP restrictions and ensure that the advance does not go beyond certain periods to form an ECB. The public-private partnership (PPP) model creates specific joint ventures in which the central government or state government cooperates with private entities (national or international) and proposes concessions for the construction, development and operation of projects. These PPPs are granted “public enterprise” status and enjoy lucrative benefits such as the simple implementation of regulatory and sectoral approvals, financing assistance and, according to the PPP model, they may even own these national assets. How are joint ventures generally funded in your jurisdiction? Are there specific requirements for funding and security measures? In addition, the recent amending law defines a joint venture as “a common agreement in which parties with common control over the agreement have rights over the net assets of the agreement.” As a result, joint ventures may be jointly liable to third parties in the debts of the joint venture, the debts of workers or even the companies subject to it, whereas the terms of the agreement between the parties to a joint venture would likely determine the size of the tax debt. [I]f, where certain services provided by the parties to a joint venture are to be allocated to the parties by an internal agreement, the rights and obligations of members who are also in this agreement are also regulated.
However, these internal agreements are not effective with third parties and interact with members. Therefore, all members are jointly responsible for carrying out the work carried out together, regardless of the internal distribution of the work. If one member of the joint venture group fails to meet its obligations, the others are jointly and several obligations to the client, if any, in order to meet these obligations.