Joint Venture Advisory — Structuring, Negotiation & Compliance

Most joint ventures that fail do so because the partners did not agree, in writing, on the hard questions: who controls which decisions, how more money will be raised, what happens when the partners disagree, and how one side can leave. JV advisory is about settling those points before money moves, then setting up the structure, filings and reporting so the venture runs cleanly.

• Fit and diligence: financial, tax and compliance review of the proposed partner, and of any business it contributes.
• Structure: choice of vehicle (company or LLP), equity split, classes of shares, board seats and reserved matters.
• Documentation: term sheet, joint venture agreement and shareholders' agreement, working with your legal counsel.
• Closing: valuation, capital issue, foreign investment reporting and bank set-up.
• Governance: board calendar, management reporting and an annual review of the JV against its business plan.

• Deadlock: escalation to senior management, mediation, and as a last resort buy-sell or put-call mechanisms.
• Funding: what happens if one partner will not fund a capital call, including dilution formulas.
• Exit: lock-in periods, rights of first refusal, tag-along and drag-along, and how exit prices are fixed. For foreign partners, exit pricing must also respect foreign-exchange pricing guidelines.
• Non-compete and related-party dealings: what each partner may do outside the JV and how transactions with the JV are approved.

Larger combinations may need prior approval from the Competition Commission of India if the parties cross the notified asset, turnover or deal-value thresholds; check this early.

Figures and timelines above reflect our understanding at the time of writing; confirm against the latest Act, Rules and notifications before relying on them.

For Indo-foreign JVs, see also FEMA and FDI compliance; for Indian companies setting up a JV abroad, see overseas subsidiary and JV setup.