Strategic Decision and Mutual Consent The conversion of a JV into a merger begins with a strategic decision made jointly by all partners. Board meetings are held to discuss the commercial rationale and legal feasibility of merging the JV with one of the partner...
Regulatory Framework for Foreign Contributions Foreign contributions in a JV are primarily governed by the Foreign Exchange Management Act (FEMA), 1999, and the Foreign Direct Investment (FDI) Policy issued by the Government of India. In certain sectors, foreign...
Eligibility to Open a Bank Account A JV formed as a company, LLP, or registered partnership is recognized as a separate legal entity. Such entities are fully eligible to open current accounts with banks in India. Unregistered or purely contractual JVs (consortia) may...
Strategic Leadership and Decision-Making The lead partner plays a central role in guiding the strategic direction of the JV. They often take the initiative in setting goals, developing the business plan, and aligning the JV’s mission. Major decisions regarding...
Reserved Matters and Veto Rights Specific decisions are categorized as “reserved matters” requiring consent from all partners, including minority shareholders. These include major actions like altering share capital, changing the business scope, approving budgets, or...
Definition of a Cross-Border Joint Venture A cross-border joint venture (JV) is a strategic business partnership formed between companies located in different countries. It involves shared ownership, risks, and responsibilities between foreign and domestic entities....
Legal Validity of Real Estate JVs Indian law allows joint ventures to be formed specifically for real estate projects. JVs are often formed between landowners and developers, or between Indian and foreign investors, or among construction companies and financial...
Applicability to Incorporated JVs JVs formed as private limited or public limited companies must comply with statutory record-keeping under the Companies Act, 2013. These statutory registers serve as official records of the company’s legal and corporate structure....
Tax Status Based on Legal Structure The tax treatment of a JV in India depends on its legal form. A JV may be formed as a separate legal entity (company or LLP) or as a contractual arrangement (unincorporated JV). If incorporated as a company, it is treated as a...
Expense Sharing Based on Ownership Ratio The most common method is to share operational expenses in proportion to each partner’s equity stake. If one partner holds 60% and the other 40%, expenses are typically split in the same ratio. This approach aligns the cost...