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Published : November 06, 2012 | Author : Samratdu
Category : Company Law | Total Views : 2216 | Unrated

  
Samratdu
Subrat Dhakal, a Chartered Accountant of Nepal and presently proprietor of S. Dhakal & Associates. I am students of the MBS, LLM and MA(Eco) as well.
 

JOINT VENTURE (JV) AGREEMENT

This Agreement is made and entered into as of the, by and between

 WHEREAS

a)      The (hereinafter referred to as “Client”) has appointed the Consultants for providing ;

b)      The Members have agreed to join hands in the form of Joint Venture to provide the said

;

c)      The Members have agreed to join hand and form a legal entity and have it registered in the to formally execute the activities.

NOW, THEREFORE, THE MEMBERS INTENDING TO BE EXCLUSIVELY BOUND, AGREE AS FOLLOWS:

1.   Definitions and Interpretations

The following words and expressions shall have the meaning assigned to them, except where the context otherwise requires:

“Client” means the and none other, except its legal successors and permitted assigns;

“Committee” means the committee formed comprising of at least one representative from each member JVs and such shall function as the decision making body for smooth execution of the Contract activities. The operation and other aspects regarding about the Committee shall be as agreed upon;

“Contract” means the contract with the Client of the ;

"Country" means the Clients Country where the Project is located;

“Day” means the period between any one midnight and the next, and “Month” means a period of one month according to the Gregorian calendar commencing with any day in the month;

“Document” means written, drawn, typed, printed, magnetized or photographic material which is capable of being copied;

“Joint Venture” means the joint venture formed between the Members in accordance with this Agreement;

“Leading Member” means the member which will take the lead in the management of the Joint Venture’s affairs and for dealing and enforcing the contractual aspects with the Client entered into, unless otherwise agreed by the Members;

"Members" mean the companies which have agreed to Joint Venture in connection with the Project;

“Project” means the undertaking or proposed or actual works in connection with Contract with the Client;

"Services" means all the services to be performed by the Joint Venture in accordance with the Contract with the Client.

1.2 Interpretation

1.2.1.   Words importing the singular also include the plural and the masculine includes the feminine and vice-versa where the context requires;

1.2.2.   The headings in this Agreement shall not be taken into consideration in its interpretation.

2.   JOINT VENTURE

2.1.            The Members hereby shall establish a joint venture being an incorporated association under the name of and have it legally registered in the of the Client’s country for the purposes of:

-performance of the services and carry out their obligation as per the Contract with the Client;

-making arrangement of the consultant as agreed and keep their work records thereof; and

- making arrangement for the safeguard of the assets procured from the fund of Client and keep up to date of records thereof.

2.2       The Members hereby appoint the Leading Member, and confirm the addresses of the Joint Venture and the addresses of the Members respectively, as stated in [Schedule 1];

2.3       Unless otherwise agreed in writing by the Members, this Agreement shall not terminate if a Member changes its name or is taken over by, or merged with, another company or partnership provided that such successor name, company or partnership is an independent professional firm acceptable to the Client (such change to be notified to the Client and his acceptance obtained).

3.   OBJECTIVE OF THE JOINT VENTURE (JV)

Main purposes and objective of the Joint Venture shall be to execute the activities as per the Contract with the Client and shall be wound up once the activities are completed as agreed upon.

4.   PERFORMANCE OF THE WORK

4.1.      The work to be performed under the Contract with the Client shall be carried out in accordance with the terms and conditions specified in the contract;

4.2.      Each Member shall be responsible for fulfilling the obligations prescribed in Contract with the Client in accordance with the terms of the Contract with the Client to the satisfaction of the Client, subject to Sub-Clauses 4.3 and 4.4 below;

4.3.      The apportionment of the Joint Venture's obligations between the Members in can be amended by agreement between the Members, subject to the consent of the Client if required;

4.4.      Any alterations or additions to the Services to be carried out under the Contract shall be made only with the consent or on the instructions of the Client in accordance with the Contract. Responsibility for carrying out additional obligations shall be as agreed between the Members, subject to the consent of the Client if required by the Contract.

 

5.   LANGUAGE AND LAW

5.1.      This Agreement has been executed in the , which shall be the binding and controlling language for all matters relating to the meaning or interpretation of this Agreement;

5.2.      The Agreement, its meaning and interpretation, and the relation between the Members shall be governed by the applicable laws of the .

6.   EXCLUSIVITY

6.1.      Unless otherwise agreed by the Members, no Member shall engage in any activity related to the Project, other than as a Member of the Joint Venture and in accordance with the terms and conditions of this Agreement. Each Member warrants that its subsidiaries and other firms or individuals over which it has control will comply with this requirement.

7.   EXECUTIVE AUTHORITY

7.1.      No Member shall have authority to bind or to make any commitment on behalf of the Joint Venture or of any other Member unless such authority is expressed in writing by the Members jointly in regard to the Joint Venture, or by a Member individually in regard to the (other) Member;

7.2.      Each Member shall provide notice of its Representative and shall give prior notice of any change in such appointment (s), temporary or otherwise, as may occur from time to time;

7.3.      The representative of the Leading Member shall be the Chairman of the Committee. The Chairman shall ordinarily convene the meetings of the Committee in every and may invite others whom he wishes to attend, in order to inform or advise the Representatives, or to record the proceedings of the Committee. The frequency of Committee meetings shall be as deemed necessary and by mutual consent of the Members involved. In the absence of the Lead member the shall be transferred such responsibilities;

7.4.      In the event of there being disagreement between members of the Committee on matters not otherwise prescribed in this Agreement the Chairman shall be entitled to use a casting vote;

7.5.      Minutes shall be kept, in the English language, of all meetings of the Committee and copies of all such minutes shall be circulated to the Members;

7.6.      The Members respectively agree to act (and agree that their respective representatives on the Committee shall act) at all times in the best interests of the Joint Venture in taking any actions relating to the Project and shall use all reasonable endeavors to settle any disputes arising between them in connection with the Joint Venture.

8.   DOCUMENTS

8.1.      All documents produced by a Member or the Members in connection with the Project which are made available to persons other than the Members shall bear the name of the Joint Venture;

8.2.      All documents prepared by either of the Members in connection with the performance of work under the Contract, and which are submitted to the Client or are to be made available to third parties on after obtaining the prior approval of the Client unless it is required to comply with the legal duty;

8.3.      Each Member shall have unrestricted access to any work carried out by the Members in connection with the Project;

8.4.      During the period of this Agreement and after the termination of the Agreement without limit in point of time, no Member shall disclose to any

-person any information which it obtains through its participation in the Joint Venture (and shall ensure that its employees shall observe such restrictions) unless the said information:

- becomes public knowledge;

- must be disclosed for the proper performance of the Services; or

- is published with the approval of the Joint Venture and, when required under the Contract with the Client.

No Member shall utilize photographs, or other data describing the Project, in promoting its own business, without the approval of the other Member(s).

8.5       Except as may be otherwise provided under the Contract, the copyright in documents produced by a particular Member in connection with the Project is granted to the Members and each Member hereby licenses the Members to use and reproduce documents produced by it;

8.6       Except as provided in Sub-Clause 8.5, each Member shall indemnify the Members against all claims, liabilities, damages, costs and expenses sustained as a result of reusing the designs, drawings and other documents produced for the Project on other projects.

9.         PERSONNEL

9.1.      Each Member shall assign a sufficient number of its employees to the Project so that the provisions of this Agreement are complied with and the Services are carried out in accordance with the Contract. However, the members shall have right to charge for the contribution to the Project on mutual consent as agreed between members;

9.2.      Each Member shall be responsible for all actions of its staff and shall continue to be responsible in all ways for its own obligations as employer of its employees;

9.3.      Notwithstanding the foregoing provisions of this Clause, each Member may allow; any person, firm or corporation over which it exercises management control; to fulfill any of the obligations for which it is responsible under this Agreement provided that, in such circumstances, the control of and responsibility for those obligations shall at all times remain vested in the Member;

9.4.      Each Member shall be entitled to invite, subject to the approval of the Client (if required) and to the agreement of the Members, sub-consultants to carry out any of that Members obligations, provided that in such circumstances the control of and responsibility for undertaking those obligations shall at all times remain vested in the Member in question;

9.5.      The engagement of sub-consultants by the Joint Venture shall be subject to the prior approval of the Client and mutual understanding between the Members.

10. ASSIGNMENT AND THIRD PARTIES

10.1.    No Member shall sell, assign, mortgage, pledge, transfer or in any way dispose of any rights or interests under this Agreement, or its interests in any sums payable by the Client other than by a change in favour of its bankers of any monies due or to become due under the Service Agreement, without the prior written consent of the Members;

10.2     This Agreement is exclusively for the benefit of the Members and shall not be construed as conferring, either directly or indirectly, any rights or causes of action upon third parties.

11. SEVERABILITY

11.1.    If any part of any provision of this Agreement is found by an arbitrator or Court or other competent authority to be void or unenforceable, such part of the provision shall be deemed to be deleted from this Agreement and the remainder of such provision and the remaining provisions of this Agreement shall continue to be in full force and effect;

11.2.    Notwithstanding the foregoing, the Members shall thereupon negotiate in good faith in order to agree the terms of a mutually satisfactory provision to be substituted for the part of the provision found to be void or unenforceable.

12. MEMBER IN DEFAULT

12.1.    In the event of insolvency of a Member, the other Member [or remaining Member (s) of rest of JV] is hereby irrevocably constituted and appointed to act for it in all matters affecting performance of this Agreement;

12.2.    A Member that delays or fails to fulfill its obligations in whole or in part under this Agreement shall be deemed in default and shall indemnify the other Member (s) in respect of the consequences;

12.3.    A notice in writing from the Client that the performance of obligations under the Contract is unsatisfactory or that the continued involvement of a Member is no longer required in whole or in part shall for the purposes of this Clause mean that the Member concerned is in default unless otherwise agreed by the other Member(s);

12.4.    If the default of a Member shall be such that the Member in question shall be substantially in breach of its obligations hereunder, the other Member(s) shall be entitled to reassign the work concerned;

12.5.    Any actions taken by the other Member against the defaulting Member pursuant to the preceding Sub-Clauses of hereof shall be without prejudice to any rights to which he may be entitled at law against the defaulting Member;

12.6.    If a reassignment of work under the Contract is made in accordance with this Clause, the defaulting Member shall not obstruct the Member who undertakes the reassigned work and shall provide him with access to all documents and information necessary for its proper performance;

12.7.    Any sums received by the Joint Venture in payment for the defaulting Members obligations already undertaken shall be used to compensate any loss or damage resulting from the default of that Member. The defaulting Member shall remain responsible for providing guarantees and bonds relevant to the obligations allocated to that Member prior to such reassignment until the completion of the Services;

12.8.    If all of the defaulting Members obligations are reassigned in accordance with this Clause, the other Member(s) shall be entitled to and shall:

-carry on and complete the performance of the Contract without the participation of the defaulting Member, its successors, receivers or other legal representatives and continue to act in accordance with the terms of this Agreement (as amended to take account of the non-participation of the defaulting Member); and

-retain for the performance of the Contract all equipment and materials purchased therefore and all assets owned by the Joint Venture at the time of the default by the defaulting Member until the completion of the Services. The defaulting Member, its successors, receivers or other legal representatives shall execute and do all deeds, documents and things necessary to enable the said equipment and materials to continue to be so used and to enable the Joint Venture to continue without involvement of the defaulting Member.

12.9.    Upon completion or earlier termination of the Contract and receipt of all amounts due thereunder, the remaining Member(s) shall account to the Member in default which shall be entitled to receive an amount equal to any sums provided by the defaulting Member towards any general funds which shall not previously have been expended, plus such Members share of any funds of the Joint Venture due to it, reduced by any losses or damage occasioned by its default;

12.10.  In the event that the share of the losses chargeable to the defaulting Member exceeds any sums provided by the defaulting Member to any general funds and the share of any funds of the Joint Venture due to it in accordance with the terms of this Agreement, the defaulting Member shall promptly pay the excess to the remaining Member(s).

13. DURATION OF THE AGREEMENT

13.1.    It has been jointly established by the Members that the Agreement shall be effective until all the activities as specified in the Contract with the Client have been completed and any extension of that period subsequently agreed between the Client and the Joint Venture, this Agreement shall thereupon terminate forthwith;

13.2     Provided that the terms of this Agreement shall nevertheless continue to bind the Members to such extent and for so long as may be necessary to give effect to the rights and obligations specified in the Agreement (i.e until the process of the deregistration of the JV is completed and all its activities are formally and legally wound up). However, the liability in case of the <specify the responsibility of the members of the JV based on the term of the Contract and the legal requirement of the country whose law is applicable>.

14. LIABILITY

14.1     Each of the Members warrants that it will indemnify and keep indemnified the other Member (s) against all legal liabilities arising out of or in connection with the performance, or otherwise, of its obligations under this Agreement;

14.2     In the event of it being alleged by one Member in writing that any legal liability is attributable to the other Member or to the remaining Members, the Members shall use reasonable endeavors to reach agreement on the liabilities to be borne by each of the Members, and in the event of the Members failing to so agree, a proper apportionment shall be determined by arbitration in accordance with Clause 19.

15. INSURANCE

15.1.    Unless otherwise agreed by the members, each Member individually shall make all reasonable efforts to maintain insurance of all the assets procured from the fund of the Client and the Personnel deputed in the work of the Project.

16. PROJECT COSTS, PROFITS, LOSSES

16.1.    Project Costs

Each Member shall be reimbursed the costs and expenses incurred by it in connection with the Project but same should be agreed between the Members of the Agreement.

16.2     Profit & Losses

The sharing of the Profit/(Loss) out of the JV activities on completion of the Contract period and closure of the activities shall be as follows:

S. No.

JV Member

 

Share

1.

Name of the JV members and their share there of:

:

 

2.

 

:

 

3.

 

:

 

4.

 

:

 

17. FINANCIAL ADMINISTRATION AND ACCOUNTING

17.1.    Each Member shall be responsible for keeping its own account in respect of payments due to it and for its own financial affairs generally. Each Member shall be responsible for dealing with its own income tax affairs, and its own social security affairs; where relevant, and for accounting accordingly to the relevant authorities;

17.2.    The responsibility of Financial Administration shall be as designated by the Members based on the mutual consent.

17.3     Fiscal Period and Accounting Books

17.3.1  The fiscal year of the JV shall, commence on of each (next) year, provided that the first fiscal year shall commence on the date of incorporation and end on completion of the Contract activities for first and the end year;

17.3.2  The JV shall maintain accounting books, records and supporting documents in accordance with generally accept accounting principles and practices in ;

 

17.3.3  Upon completion of the audit after the end of each fiscal year, the JV shall submit the financial statement and tax audit report to each members. Further, the JV shall keep its accounting books and records at its registered office of the JV for inspection by the Members or their representative upon request of either party;

 

17.3.4 Accounting records and the other documents related to the Project shall be maintained at least for the period of .

18. GUARANTEES AND BONDS

18.1.    Unless otherwise agreed by the Members, the Members severally shall provide guarantees and bonds in proportion to their respective shares in the Services sufficient for the total of guarantees and bonds required of the Joint Venture by the Client. The Members severally shall be responsible for administration and extensions, if required, of the guarantees and bonds they have provided.

19. ARBITRATION

19.1.    Any dispute arising out of or in relation to this Agreement shall be settled amicably between the parties failing this it shall be finally settled by arbitration;

19.2.    Such arbitration shall be conducted in accordance with the Rules of United Nation Commission for International Trade Law (UNCITRAL);

19.3          The venue of arbitration shall be ;

19.4.    The Laws of the shall be applicable in arbitration.

20. NOTICES

20.1.    Notices under the Agreement shall be in writing and will take effect from receipt at the address stated in [Schedule 1]. Delivery can be by hand or facsimile message against a written confirmation of receipt or by registered letter or courier;

20.2.    The official address of the Joint Venture to be included on all documentation signed in the name of the Joint Venture shall be as designated in [Schedule 1] hereto or such other address as shall be agreed from time to time by the Members, subject to the requirements of the Contract with the Client.

21. PAYMENT AND TAX

21.1.    JV members shall not be disbursed amount other than that to be disbursed the work advance to execute the Project activities as agreed in the Contract with the Client or as mutually agreed upon from the JV business. The distribution of the profit shall be done only after completion of the Project activities and closure of the accounts of the JV. However, this clause shall not bar JV from receiving the amount of their contribution to the Project as be mutually agreed on their billing for the same;

21.2.    The members shall be personally liable for the payment of their taxes; being a members of the JV; JV shall have no liability related to the business of the members other than that related to conduction of the activities of the JV;

21.3.    The withholding tax, advance tax shall be imposed on the payment disbursed to the JV Members based on the prevailing law of the Nation. None of the member shall complain over such lawful deduction on the payment disbursed to them;

21.3     It shall be the duty of the JV to provide the supporting and other document to prove the payment of the tax and the genuineness of the deduction when demanded by the Members.

22. EFFECTIVE DATE

This Agreement shall come into effect on the date of signature by all the Members of the JV.

23. MODIFICATION

This Agreement may be changed, amended or otherwise modified only by means of written agreement executed by the duly authorized representatives of the Members. Such a modification shall be effective to the extend it is not ultravires to the Contract with the Client.

24. CONFIDENTIALITY

The parties hereto agree to keep secret and confidential all the information furnished to them by other party or the JV which are designated as confidential by said other party or the JV, or considered desirable to remain secret. The parties further agree not to use such information for any purpose whatsoever except in a manner expressly provided for in this agreement.

25. FORCE MAJEURE

Neither party shall be liable for any breach or non-observance of any term or condition of this Agreement on account of force majeure which shall mean fire, explosion, acts of government and other similar circumstances beyond a party's control.

IN WITNESS WHEREOF, the Members have caused their duly authorized representatives to execute this Agreement on the date first written

 

Name of the signatories of the JV Members and the witness thereof for Validation/approval of the agreement.

 

 

SCHEDULE 1

JOINT VENTURE AGREEMENT DATA SHEET

1.      NAME AND ADDRESS OF THE CLIENT:

2.   COUNTRY:

3.   PROJECT BRIEF:

4.   LEAD MEMBER, REPRESENTATIVE OF JOINT VENTURE AND MEMBERS OF JOINT VENTURE ALONG WITH THE OFFICIAL COMMUNICATION ADDRESSES:

 

5.   LANGUAGE AND LAW:

The joint Venture Agreement shall be written and interpreted in English Language

The Laws of shall apply to this Agreement.

 

Note: It is only the sample of the JV agreement entered in Nepal with the Foreign Party to execute the Contract with the Clie

 




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