Fundamentals of joint venture agreement.pdf

4.2 The Negotiation PhaseAt this point, the partners should focus not only on the detailsof the type of joint venture but also on the potential problems in theparties’ future relationship. Some of the issues are listed below:∗ Agreement over business plans;∗ Probe into the inadequacies and weaknesses of each partner;∗ Adequate documentation - confidentiality agreement, technologytransfer, technology licensing, patent or trade mark licensing,supply of machinery etc.;∗ Clear understanding as to what each partner can do, and cannot do,to avoid any misunderstanding later on;∗ The extent of ownership of each party in the joint venture;∗ To define the agreed dividend policy;∗ Building of consensus on key problems;∗ Setting exit barriers for each partner through mutual interdependence;∗ Methods of valuing the business and settling the partner’s dues incase one of the partners wishes to pull out of the alliance at a laterstage.4.3 The execution phaseThis involves putting up the project within the shortest timeperiod. This needs a great deal of team spirit amongst personnel fromall the partners. The technical information actually starts flowing atthis stage. Disputes may arise on equipment pricing, on quality ofassigned staff, technological changes or adaptations found necessary