Joint Venture Agreement for Make a Deal Two Companies


A joint venture agreement is a term of joint or joint venture contract. Joint venture usually concerning Small Business which also referred to a partnership agreement. The purpose of a partnership agreement is cooperation between small entrepreneurs and large actors, the tangible form of this partnership on capital or skills. The cooperating company usually called a joint venture company.

Joint Venture Agreement 2 Joint Venture Agreement

Establishing a joint venture agreement is the first step in developing a joint venture company. The joint venture agreement itself contains the parties’ agreement in the matter of, among other things, ownership of capital, shares, increment of share ownership, finance, management, technology and expertise, possible dispute settlement, and termination of an agreement. Therefore, before agreeing, you need to know about the joint venture in detail.


All About Joint Venture Agreement


Here are some things that you should know about joint venture are as follows:

  1. Terms and Conditions

Establishing cooperation with a joint venture can be an alternative, although the initial promotional affairs are quite troublesome, this will not be a problem anymore. But some requirements must be met, such as: Having a quality product, business is not a product of money games, online social gathering, or writing that is merely a lure, and the Product does not have in common with other affiliate products.


  1. Types of Joint Venture

Based business field of joint venture deal such as Port; Production, transmission, and distribution of electricity to the public; Telecommunication; Service; Flights; Drinking water; Common trains; Atomic energy spikes; and Mass media.

In general, the type of joint venture is: First, the limited co-operate. This type usually occurs in two businesses that work together on a limited and specific basis with specific terms and conditions. Second, the Separate joint venture business in which the two joint ventures own shares and managed parts. Third, Business partnerships where to build cooperation to merge companies.

  1. Advantages and Disadvantages

The benefits of Joint Venture have a local ally. The regional partners will understand more about the circumstances in which the Joint Venture Company is established such as customs, and community institutions in the local environment. Other than that, Local allies may have technology that is suitable for the local environment. This cooperation will also make it easier Access to the host country’s capital through the relationships and reputation of regional allies.

Disadvantages of Joint Venture company is If you are wrong in choosing allies then it will increase the political risk faced. Also, the existence of the transfer price of a product or component will create a conflict of interest between both parties, and There may be a difference of views between the local allies and the company.

  1. Elements of the Joint Venture Agreement

Several items must exist in the joint ventures contract such as a description of the parties in the deal, Consideration or consideration, Description of the objectives. Then deadlines Cooperation time, Dispute settlements, Organization of cooperation, Financing, Basis of valuation, Relationship between partner and company Joint Venture, Share transfers, Legal form, and choice of law, Entry by the partner. And Parties and Objects in that contract.

That’s a few things you need to know before deciding to make a joint venture agreement. You can discuss with a legal expert before entering into a company agreement and merger. not only that, before establishing cooperation you also have to know the ins and outs of companies that will be invited to cooperate. Before agreeing, it is crucial for you to consult a lawyer to avoid any legal issues that may occur and to make the agreement following the applicable law.

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