A joint venture can be contractual, where parties cooperate under an agreement, or equity-based, where they form a new company. The JV agreement covers contributions, shareholding, governance, reserved matters, deadlock resolution, non-compete, IP, exit and dispute resolution. Foreign partners must follow FDI rules, and large combinations may need Competition Commission approval.
Choosing a structure
| Type | Suits |
|---|---|
| Contractual | Short projects, bids |
| Equity | Long-term businesses |
Key clauses
- Contributions and funding
- Board and reserved matters
- Deadlock resolution
- IP and confidentiality
- Exit and buyout
Regulatory checks
FDI sector caps, FEMA pricing and competition law thresholds.
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Clarify business plan, dividend policy and valuation for exits.
Frequently asked questions
Is a JV company taxed separately?
Yes, an equity JV company is a separate taxpayer.
Can JV partners compete?
Non-compete clauses during the JV are common and generally enforceable.
What if partners deadlock?
Use escalation, mediation, buy-sell or put and call options.
Is registration needed for contractual JVs?
No separate registration, but tax and GST implications apply.
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