Joint Ventures: A Comparative Analysis Of India And International Regime
- IJLLR Journal
- Jul 17
- 1 min read
Amrutha Pushpan, LL.M. (Corporate Law), Vivekananda School of Law and Legal Studies
1. INTRODUCTION:
Joint Ventures are defined as a contractual arrangement between two or more entities that pool their resources to accomplish a specific task wherein they have rights to the net assets of the arrangement. They are based on the perpetual running of the business or the short period of time at the end of which joint ventures ceases to exist. Each participant is responsible for associated profits and costs wherein joint ventures have its own entity which is separate from other existing businesses i.e. parties under joint venture agreement have separate identities. The focus is to attain a single, predetermined goal or project. Herein, the parties decide the purpose, duration and structure of joint ventures. There is no statutory definition of joint ventures but New York has elucidated four elements of Joint Ventures which are as follows:
a.) An agreement between parties manifesting their intent to associate as Joint Ventures.
b.) Mutual contribution by parties to joint ventures.
c.) Some degree of joint control over single enterprise or project.
d.) A mechanism or provision for sharing of profits or losses.
Joint Ventures provide fast way to influence the complementary resources that are available with other partner, shares each other’s skills, access to new market and diversify into new business. Each party to joint ventures have a responsibility to act in good faith in all matters relating to the venture, taking care to uphold the interests of all parties involved and this amounts to legal fiduciary duty.
