JOINT VENTURE AGREEMENT Joint ventures ... - Majmudar & Co.

Upon identifying a business opportunity it is most essential to select anappropriate partner and open up a dialogue to explore mutual interest without anyfirm commitment. The selection process of partners can be based on some of thefollowing characteristics:(i)(ii)(iii)(iv)(v)long term commitment to the industry, country and venture;the value added by the parties should be complementary. For example, thelocal partner may have knowledge of the local market, business contacts,distribution network, whereas the overseas partner may have the technicalexpertise, product range, trade marks, capital and management techniques.Each partner may be given appropriate recognition for the strength andfacilities they bring to the alliance;experience in own area of expertise;adequate financial strength; andstrong local market presence.It may be reiterated that selection of an appropriate joint venture partner is mostimportant as a wrong selection can otherwise break up the joint venture.The negotiation phaseAt this point, the partners should focus not only on the details of the type of jointventure but also on the potential problems in the parties’ future relationship. Someof the issues are listed below:(i)(ii)(iii)Agreement over business plans;Probe into the inadequacies and weaknesses of each partner;Adequate documentation - confidentiality agreement, technology transfer,technology licensing, patent or trade mark licensing, supply of machineryetc.;Majmudar & Co., International Lawyers, India 3Mumbai Office – Tel: +91 22 6630-7272; Fax: 6630-7252; E-mail: mailbox@majmudarindia.comBangalore Office – Tel: +91 80 4147-0000; Fax: 4147-0010; E-mail: mailbox@majmudarindia.comIntegrated Network Offices – New Delhi, Chennai and Hyderabad