In many cases, foreign party joins in the financial participation with the Indian party. In such cases, a Company is incorporated. The foreign party make take minority ownership, fifty –fifty ownership, majority ownership etc. The Agreement should provide for the following:
- Capital Structure of the Company.
- Management of the joint venture company.
- Decision of financial policy of the Company .
- Change of Partnership Arrangement .
- Other Provisions.
- Check whether the parties have decided to incorporate a Company to initiate joint venture and if that be so, check whether capital structure of the Company to be incorporated has been provided.
- Check whether provision [providing the No. of directors to be nominated by each party on the Board of Directors of the Joint Venture Company has been given.
- Check whether the clauses providing about the decision of financial policy of the Company has been incorporated.
- Check whether the provision about change of partnership arrangement in the Company has been incorporated.
- Check whether proper stamp duty has been paid on the Agreement .