Joint Venture Consultancy

Certain jobs or projects require large investments or involve high risks or sometimes also require multi-skills. An individual or a small firm may not be able to carry out this stand-alone project. Thus two or more individual or small firms fulfilling requisite skills and resources come together and form a temporary partnership. This temporary arrangement is called a joint venture. A memorandum of an undertaking is formed between the parties for this joint venture.

We at VJM & Associates LLP help in planning of joint venture proposals for various business entities sailing on our joint venture services parameter. VJM & Associates LLP works meticulously when it comes to building up a comprehensive archetype for the business. We aim at knowing the company inside out for the efforts to sail on expectations.

GettyImages 726793923 compressor

Definition of the joint venture

A joint venture implies a temporary partnership. In this, two or more persons/ entities come together for a specific period of time or for a specific purpose. The partners of this arrangement are called co-venturers. They share profits or losses in agreed proportion or equally as decided in the memorandum of understanding.

Every joint venture has two or more co-venturers. The co-venturers contribute to the joint venture with tangible and intangible assets. Hence, the co-venturers influence the joint venture through the following ways:

Formal agreement

Several legal documents are prepared and maintained along with the joint venture agreement which spells the scope of the venture, types of decisions, approvals, percentage of votes, etc. Also, some terms and conditions are set for day to day working of the venture.

Staffing

The co-venturers mutually decide amongst them as to how the staff required for the venture would be resourced. Also, the staff is introduced to each other for efficient working between them.

The employment of the existing staff is preferable as the venturers are known to them and their working style.

Technology sharing

The co-venturers provide available technology and knowledge. Also sometimes the technology is hired and employed for the joint venture

 

  • A joint venture has a limited period of duration as they are formed job specific
  • The partners of Joint venture are called as co-venturers
  • The sharing of profit and loss amongst the coventurers is pre-decided in the specific ratio
  • The initial capital may or may not be introduced by the co-venturers
  • Once the purpose of a joint venture is completed, the same is dissolved
  • The financial accounts of a joint venture are settled at the time of dissolution

The transactions of businesses that are normally done through a joint venture are constructing bridges, roads, dams, seasonal purchase and sale of goods, film production, purchasing land to divide it into plots and sell, etc.

However, the motive behind forming joint venture are listed below:

  • Domestic and global competition: Joint venture helps enhances the capability to complete both domestically and globally as companies with different expertise and different areas come together to achieve a common goal.
  • Increased market value and better product line: Joint venture helps in diversification of business and also increases the market value of the business.
  • The pooling of licensing and know-how technologies: A project sometimes requires specialization in multiple areas and it is not possible for a single person to possess all such expertise. Therefore, JV is formed to pool the expertise and know-how technologies.
  • New Market Penetration: JV helps in smooth entry into new market as all the requisite knowledge and competency is possessed by the local player. Local players also help in completion of all legal requirements. Therefore, a new player can easily enter and survive in a new market.
  • Gaining access to expertise, managerial experience, finance, raw materials, etc
  • Getting opportunities for economies of scale of marketing, production, research, and development
  • Sharing investments of the high-end projects: Few projects require huge funds. A company may obtain funds through various finances but the same involves a lot of risk, increases fixed cost and also reduces net worth of the business. Therefore, one of the easy ways to accomplish the high value project is through Joint Venture. Co-ventures share investment and in return share profit and loss of the JV.
  • Sharing the capabilities and skills of co-venturers

The joint venture is work and job-specific. And so is very useful for turnkey projects. The major advantages of forming a joint venture are as follows:

  • Since the resources, capacities, and capabilities of different entities are merged and pooled together, the joint venture lets the project start without any delays due to legal and other formalities. Generally, local players help in completion of all legal formalities and possess all requisite licences.
  • Diversification in another business line or products is easier through a joint venture as experience and expertise of other ventures can be banked upon.
  • Exploring a new market is one of the beneficial aspects of a joint venture as local player as co-venture possess all expertise which are required for survival in new market.
  • Additional gains, higher profitability, growth are some more advantages of a joint venture.
  • If the joint venture requires the existing setup, then underutilized plant and equipment can be optimized while the formalities of setting up are also reduced.
  • Backward and forward integration can give access to resources, a captive market, etc
  • The existing marketing and distribution of the co-venturers can be accessed

Role of Professionals in forming a joint venture

Forming a joint venture needs lots of research and formalities to be done. VJM & Associates has a dedicated and expert team on its board who can guide and advise you for forming a successful joint venture. It involves the following steps:

The very first step is to assess why the joint venture is to be formed. Is it necessary to form a joint venture or  the existing business can endure the proposed activity. Once it is finalized that a joint venture is essential, then the next is to search for the potential co-venturers.

It is vital that the co-venturers have identical objectives for the venture and have compatible operating policies.

After the search is done and the co-venturers are finalized, Then the team at VJM & associates assist in valuing the existing business and the venturers worth on the basis of the credit rating, financial statements, etc

Also, the resources available and those that can be utilized for the joint venture are assessed.

An agreement or memorandum of understanding is drafted and discussed with all the venture partners. VJM & associates have expertise in preparing such agreements and have an expert team to analyze the terms and conditions to be incorporated in agreement. Any loop-hole in agreement may lead to undue advantage to any of the co-venturers. Once the agreement is finalised, then all legal formalities are completed and the same is signed by all co-ventures.

During the lifetime of the venture, if the need ever arises, we are accessible to you. Also, the financials and accounting part is taken care of by the finance and account team of VJM & associates.

The profitability arising out of the venture is monitored time to time and distributed amongst the partners in the agreed ratio

Once the purpose of a joint venture is fulfilled, it gets dissolved. We also assist in the dissolution process.

The disposal or transfer of assets of the venture, the profit-sharing, and proper closure are included in the exit policy. We give the best advice for proper closure of the venture

Any other  factors for a joint venture such as the following are also taken care of by VJM & Associates:

  • All the documentation part and filing it with legal authorities
  • Any statutory compliances as required
  • Sometimes, if required, we also assist in finding additional resources and technology

The team at VJM & associates LLP is designed in a way to cater to all your needs regarding Joint venture projects. We provide end to end solutions to all your queries and problems. The advice by us is unbiased and for the benefit of the venture and not for the benefit of a single person.

What people say about us

Frequently asked questions

A business preparation between two or more organizations who share the governance, profit, return of investment, expense, ownership, etc for the benefit of synergy from the competitors, expansion, infusing capital, etc is called a joint venture

E.g. JV of Larsen & Tubros with MBDA for making guided weapons and guided weapons systems for India in India and same is formed by the name of L&T MBDA Missile Systems Limited.

The types of a joint venture are as follows:

  • Equity Joint-Venture: In this form of JV, a separate legal entity is incorporated with limited liabilities. Therefore, liability of each co-venturer is limited to their share. All co-venturers share profit and loss in proportion to their respective capital contribution.
  • Co-operative Joint Venture: This form is opposite of Equity Joint Venture. In this form, co-venturers do not form any separate legal entity. Rather a partnership if formed with unlimited liability of co-venturers. Further, profit is shared in agreed ratio and not necessarily in the ratio of their capital contribution.

Joint venture benefits include:

  • High efficiency
  • Access to new markets
  • Access to additional skills and resources
  • Additional profitability
  • The synergy of technical know-how

A joint venture involves co-operative arrangement among two or more entities aiming at starting a new business. The entities involved normally contribute capital and assets and share the profits and losses arising out of the venture.

VJM & associates is committed to assist you in all the legal, drafting, and forming processes of joint ventures. Further, all post incorporation services are provided for smooth running of business such as accounting, applicable regulatory compliances, resolving conflicts between co-ventures. Post completion of specified objectives, we help in formal closure of JV

Why Choose us

Client Centric Approach

Client is the key driver of our service offerings.  Our approach to service offerings is based on a client centric and customised approach.  Our specialised teams are a mix of technical and industry experience in order to serve clientele for their specific needs.

Quick
Turnaround

We always endeavour for a quick turnaround time to serve our clientele.  We are supported by an experienced and client focussed support teams to offer timely services to our clientele. In case of any business exigencies and time sensitive service requirements, you can always count on us.

Team
Work

We have built high performing teams supported by strong work ethic. Our team is a mix of experts, professionals and support staff from technical and varied academic, cultural, social and ethnic backgrounds.  We believe that this diversification plays a vital role in motivating the team into High Performing Teams.

Open
Communications

We believe that open communication is the core principle in order to demonstrate trust, build long lasting and valuable relationships with clientele.  We are committed to ensuring transparency in communication, service offerings and delivery. 

Driving quality in delivery

Our service offerings are driven by quality and reviews at every level. We strive to provide a qualitative and value-added delivery to our clientele. At all times, we endeavour to provide exceptional client service by meeting client expectations and driving client satisfaction.

Blogs on Joint Venture Consultancy

extension of due date of AGM

Decoding extension of due date of AGM

Considering the special reasons of COVID-19 and in pursuance of power given under section 96(1) of the Companies Act, the Registrar of the company has extended the due date of holding AGM by 3 months for the year ended on 31.03.2020 without any requirement of filing GNL-1.

Read More »



Want to talk to us

Leave your Name, email, Phone number along with what you are looking for in message box or you can call us at 011-41715118

V J M & Associates LLP

Contact Us

Not found what you are looking for

Write us for Article request, Feature request or any specific query

Great! Sharing is good

Share on facebook
Share on linkedin
Share on twitter
X