Most Important Types of Joint Ventures!

1. Types of joint ventures.

Three most common types of joint venture companies may be described as follows-

[A] Two parties, who/which may be individuals or companies, one of them non resident or both residents, incorporate a company in India. Business of one party is transferred to the company and as consideration for such transfer; shares are issued by the company and subscribed by that party. The other party subscribes for the shares in cash.

[B] Alternately, the above two parties subscribe to the shares of the joint venture company in agreed proportion, in cash, and start a new business.

[C] Promoter shareholder of an existing Indian company and a third party, who/which may be individual/company, for more detail visit www.jointwebventures.com one of them non-resident or both residents, collaborate to jointly carry on the business of that company and its shares are taken by the said third party through payment in cash.

2. Incorporation.

In case a new joint venture company has to be formed in India, the following are pertinent issues to decide:

[A] Formalities

{1} whether the joint venture company will be a public or a private limited company,

{2} the place of Registered Office of the Joint venture Company,

{3} propose a name of the joint venture company and check its availability from the Registrar of Companies {ROC} where the registered office of the company is to be situated and the company is to be incorporated,

{4} choose the subscribers to the Memorandum of Association which will obviously include the partners to the joint venture and their nominees,

In case of public company, after obtaining certificate of Commencement of Business for which the company has to file with the ROC prospectus/statement in lieu of prospectus, and the statutory declaration u/s 149 of the Companies Act 1956, duly stamped.

3. Inter-corporate investment u/s 372A of Companies Act.

Where an Indian company [partner] acquires shares of the joint venture company which is exceeding 60% of its [Indian company’s] paid-up capital and free reserves or 100% of its free reserves, whichever is more, for more detail www.joint-venture-softwares.com Section 372A will apply requiring prior Board decision of the Indian company as well as special resolution of its shareholders. If a foreign company acquires the shares, this section will not be invoked as it applies only to a "company" defined under section 3 {1} [I] of the Act which does not take into account a foreign company.

4. Approvals

The Joint Venture agreement should be conditional upon obtaining all necessary approvals/ consents/ licenses /permissions of appropriate agencies of Government of India like RBI/SIA etc within specified period. If any of the approvals are not received, or received late, the agreement cannot be enforced and the joint venture cannot proceed on the basis of the Agreement.

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A 22 YEAR OLD COMPUTER ENGINEER VENTURING INTHE I-MARKETING