What is meant by joint venture?
A joint venture is a combination of two or more parties that seek the development of a single enterprise or project for profit, sharing the risks associated with its development. The parties to the joint venture must be at least a combination of two natural persons or entities.
How do I start a joint venture?
How to form a joint venture in 5 steps
- Find a partner. First, finding a joint venture partner (or more than one partner for larger joint ventures) starts with clearly defining your objective.
- Choose a type of joint venture.
- Draft a joint venture agreement.
- Pay taxes.
- Follow other applicable regulations.
How do I register a joint venture agreement?
Joint Venture Registration Process in India
- Step-1: Locate an Indian partner.
- Step-2: Venture Agreement setting out the rights and responsibilities of the Parties forming a Joint venture.
- Step-3: In case the Joint Venture Company is a new company, incorporate a new company (public or private) and invest in agreed ratio.
Can an individual enter into a joint venture with a corporation?
Joint ventures are more common in corporations because they are prohibited from entering into a contract of partnership with an individual or another corporation [See: SEC-OGC Opinion No. 16-22]. Joint venture has been generally understood to mean an organization formed for some temporary purpose.
How do joint ventures work?
A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a JV, each of the participants is responsible for profits, losses, and costs associated with it.
Why do companies do joint ventures?
A joint venture affords each party access to the resources of the other participant(s) without having to spend excessive amounts of capital. Each company is able to maintain its own identity and can easily return to normal business operations once the joint venture is complete.
How many minimum members are required in joint venture?
A private limited company must have at least two shareholders, while a public company should have at least seven shareholders. Under the Companies Act, 2013, it is mandatory that at least one director of every company is a resident of India.
Is it necessary to register a joint venture?
As per the Indian Partnership Act 1932, it is not compulsory to register a partnership firm. However, registration of a partnership firm is recommended as registration carries certain distinct advantages.
Is joint venture subject to income tax?
From the above definition, a joint venture or consortium formed for the purpose of undertaking construction projects are not treated as a corporation, and as such NOT SUBJECT TO INCOME TAX.