This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof, and supersedes all prior negotiations, understandings and agreements. A License Agreement is a contractual agreement where the licensor authorizes the licensee to use the rights to a protected IP. It is a non-binding document that is used in the early stages of negotiation between the parties, which states their duties and lays down a road map for the future. What are the condition precedent and condition subsequent? How would the shares be transferred under different circumstances? The LLP Act permits the conversion of a partnership firm, a private company and an unlisted public company into an LLP, in accordance with specified rules. Therefore, the parties to the JV should ensure that the current main objects of the company are vide enough to cover the proposed activity of the JV Company. Following are a few example of such clases: When two parties, especially two big firms join hands for a JV, a lot of confidential information regarding each other and their companies is often involved in the process. The partners to the JV may be contributing in terms of some tangible assets like plant, machinery, land, equipment etc (“, , or might even decide to transfer the whole of their business unit to the newly formed JV at a going concern basis along with all the licenses, grants and authorization. Nishith Desai Associates – Joint Ventures in India (May 2013 Edition), www.corporate.findlaw.com/corporate-governance/technology-based-joint-ventures.htm, Anil Chawla Law Associates LLP – Guide to JV in India (April 2020 Edition), Weekly Competition – Week 4 – September 2019, Weekly Competition – Week 2 – October 2019, Weekly Competition – Week 3 – October 2019, Weekly Competition – Week 4 – October 2019, Weekly Competition – Week 1 – November 2019, Weekly Competition – Week 2 – November 2019, Weekly Competition – Week 3 – November 2019, Weekly Competition – Week 4 – November 2019, Weekly Competition – Week 1 – December 2019, Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions), How to become a Drone Lawyer (with Sample Lesson on Drone Laws), Lack of jurisdiction – return or transfer, Khyar-Ul-Bulgh – its implications in the Muslim marriage. The contribution of IP assets to the joint venture may be in the form of an assignment or a license. This arrangement can also be termed as Corporate JV. The LLP Act permits the conversion of a partnership firm, a private company and an unlisted public company into an LLP, in accordance with specified rules. It provides the companies to penetrate into a new market, wherein it was previously restricted due to shortage of funds, technology or prohibitory regulatory framework. Also, the documentation for each of these structures needs to be carefully drafted and should include all the relevant clauses, which would lead to smooth operation of the business of the JV and would provide for appropriate remedial solutions in dispute and deadlock situations. Click here to see more details. The liability of the parties are limited. | Powered by. Structural Alliance/Cooperation Agreement. (“LLP Act”). The Companies Act, 2013 requires every company to have a Memorandum of Association (“MoA”) and Articles of Association (“AoA”). How much would be the stake of each partner to the JV? A partnership firm is created under the Partnership Act, 1932, and is in many respects simpler than a company in terms of formation and compliances. The LLP has the basic features of a corporation including separate legal identity. On the other hand, if the business does not require such investments and is to operate on a much limited scale, then Partnership could be their optimal structure. What are the restrictive covenants on the company and the parties? The parties undertake to provide money or other resources as their contribution to the assets or other capital of that legal entity. The main requirement in the MoA will be to make the main object clause sufficiently wide to cover the company’s proposed activities because the objects specified in MoA, as required by the Act, cannot be overstepped. Much more compliance than a Partnership Firm. What is the provision for future issues of capital? Articles of Association are regulations for internal management of the company. The type of agreement you will enter into will depend upon the kind of structure that you choose to go ahead with: Following table explains the different definite agreements which are required to be entered into as per your chosen structure: TYPE OF DEFINITIVE AGREEMENT REQUIRED FOR DIFFERENT STRUCTURES IN A JV, Strategic Alliance Agreement or Cooperation Agreement. What is the composition of the board and management arrangements? Non-Compete clause prevents the parties to the JV from soliciting the clients/customers of the JV or of the parties to the JV during the tenure of the J.V, and even for some time afterwards. . The contractual JV might be used where the establishment of a separate legal entity is not required or the creation of such a separate legal entity is not feasible. They may be broad based or narrowly defined and the main classification of JVs is as corporate JV and contractual JV. What updates do you want to see in this article? Memorandum of Undertaking (MoU) or Letter of Intent (LoI), (such as Technology transfer agreements/BTA etc. When the venture is dissolved, either after some time or goal completed 2. A partnership represents a relationship between persons who have agreed to share the profits of business carried on by all or any of them acting for all.
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