Joint Ventures in India are very popular. There is no separate law for Joint Ventures in India but in certain cases government approval is required such as in case of involvement of an NRI or PIO partner or any foreign partner. This approval can be taken from RBI, if joint venture is covered under automatic route and from FIPB if not covered under automatic route. There are different types of joint venture and some of the popular are-:
- Two parties, could be individuals or companies, incorporated a company in India. These two could be residents of India or else one of them is allowed to be non resident of India. Business of one party is transferred to the company. As the consideration for such shares, shares are issued by that company and subscribed by that party.
- The above mentioned two parties, in agreed proportion, in cash subscribe to the shares of the joint venture company, start a new business.
- Third party and promoter shareholder of an existing Indian company
- Promoter of an existing Indian company and a third party (individual/company), both residents and one of them non-resident, join to carry on the business of that company. After payment in cash, its shares are taken by the said third company.
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At the time of Incorporation of Joint Ventures in India there are certain formalities which need to be considered. It is obligatory to judge that the joint venture company will be a public or private ltd. Company, the place of Registered Office of the Joint venture Company and check the availability of proposed name from the Registrar of the Companies where the registered office of the company is need to be situated and the company is to be incorporated. It is also mandatory to
- Get the MOM&AOA printed after preparing it in consultation with the joint venture partners.
- Submit the duly signed and stamped MOA&AOA to ROC along with the fees and necessary documents such as statutory declaration u/s 33 of the Companies Act, 1956 and Form no. 18 u/s 146 of the Act regarding the address of the registered office.
After finding all the documents satisfactory ROC will issue certificate of incorporation, immediately in case of private limited and after obtaining certificate of Commencement of Business in case of public limited company. Public limited company has to file with the ROC prospectus or statement in lieu of prospectus, and the statutory declaration u/s 149 of the Companies Act 1956, duly stamped to obtain certificate of Commencement of Business.
There are different procedure needs to be fulfilled with the view point of obtaining permission of Joint Ventures in India. Above mentioned things are just few things out of all other documentations, aprovals and formalities. Talking about the recent joint ventures in India reminds about the planning of BHEL, BEL to float joint venture for solar panels facility, SPX Corp. and Thermax Ltd. Joint venture deal. There are many other joint ventures which are under process.