A joint venture between two corporate entities is considered to be an agreement drafted or initiated with a sole agenda of earning profit by working simultaneously and exploiting each other’s assets and business.
The given article by commercial lawyers of Dubai scrutinizes the imperative stipulations or important provisions to be considered prior to signing joint venture agreements. In addition to this, it enumerates the clauses that will be inclusive in the following agreement and thus should be kept in mind by the drafter during drafting of agreement.
Why and What to Consider?
In case, the companies are getting together in form of a joint venture, they are required to set their priorities right towards the joint venture agreement as it is a supreme documents which can even lead to change in memorandum of association and article of association of the concerned companies, if the agreement provides for. While making these agreements, one is expected to undertake practical as well as legal consequences of the same into consideration.
A joint venture is always setup for a specified objective that the parties to it, seek to achieve. As a result the prime focus, while making a joint venture agreement is that it should be embracing an objective clause within it. On the basis of the requirement of the parties, joint venture can also be differentiated in various kinds. It can take up the form of contractual or structural or for that matter, it can even be both. This way of carrying business is really popular amongst the foreign investors.
The following is the list of considerations, which one should treat as focal point in order to set up am joint venture agreement: