Foreign businesses who want to enter India have a variety of options. a) They can register as a Branch Office, Liaison Office, or Project Office if they desire to enter as a non-corporate company. b) If they desire to engage as a corporate organization, they can do so either through a joint venture with an Indian corporate entity or a limited liability partnership, or they can do so as a wholly-owned subsidiary company (WOS).

One of India’s favorite entry methods is joint venture registration.

In India, registration as joint ventures

A joint venture typically forms when two or more businesses or individuals are interested in working together on a shared topic. It may take the shape of joint venture partnerships or joint venture companies. Each party contributes resources, products, services, and money.

Types of joint ventures in India

In India, joint ventures of the equity joint venture and contractual joint venture varieties may be formed.

In the case of equity joint ventures, two or more businesses or parties agree to establish a new third entity through the use of a contract, and both parties agree to provide capital in the form of shares as well as money or other resources to the company’s assets. For long-term cooperative enterprises, this is appropriate.

Contractual joint ventures are ones in which two parties collaborate on the basis of a contract rather than the creation of new legal organizations. When a joint venture must be created to carry out any temporary contract for a little period, this is preferred.

selecting an Indian business structure for your joint venture

The most common option for foreign investors in India is a joint venture in the form of an incorporated company, although there are other options as well:


  • Limited Liability Partnership or Company.


  • Agreements for cooperation or
  • strategic alliances.

In a company joint venture, the parties may work together to form a new firm or with the promoters of an existing one. The most freedom is available when establishing a new business since the entity can be set up to meet the requirements, intentions, and obligations of the involved parties. A public business should have at least seven shareholders, but a private limited company must have at least two. Every firm must have at least one director who resides in India in accordance with the Companies Act of 2013.

For an LLP, the JV’s participants create a legal entity in accordance with the Limited Liability Partnership Act of 2008. This could be accomplished by the JV partners creating a brand-new LLP or by transferring one partner’s interest in an already-existing LLP to the JV partner. An LLP firm needs a minimum of two chosen partners, one of whom must be an Indian citizen.

The Partnership Act of 1932 establishes a joint venture partnership. This kind of JV combines elements of a contractual JV and a corporate JV. The relationship between the parties who agree to split the profits of their firm, which is either controlled by all of them or by any of them acting on their behalf, often defines the business structure of a partnership JV. However, exceptions are provided for non-resident Indians or people of Indian descent. Partnership firms are not permitted for JV by foreign residents in India.

When a JV is a strategic alliance, the parties involved will agree to work together as independent contractors as opposed to being partners or shareholders in a business. In this case, the rights, obligations, and duties of the partners to the JV as well as those of the JV parties and third parties will be outlined in the JV contract. The length of their legal partnership will also be spelled out in the JV contract. Due to the contract’s binding nature, any breach entitles the party who has been wronged to take legal action against the offending party.

Advantages of joint venture

The principal benefits for a foreign investor selecting a JV structure when entering India are as follows:

Access to the established marketing and distribution networks of the Indian partner, access to the financial resources that are accessible to the Indian partners, and access to the established contacts of the Indian partners will all make it easier to start up activities in India.

A JV also gives the parties involved the chance to share risk management for new enterprises. By splitting the liabilities through a JV, they can reduce their individual liability.

JVs give the partners numerous flexible options for business diversification. A JV may be established solely for a portion of the business or as a step before a full merger.

A local partner with a specific stake in the company is required by law before starting a business or making investments in particular market sectors where foreign participation is still limited.

Registration of a Joint Venture as a Corporate Entity

There are two ways to create a joint venture registration in India under the premise of a company:

Either a new business is formed and shares are held by both organizations or parties, or

There is cooperation between the company’s promoters and the current business itself.

Out of the options listed above, incorporating a new company is the best choice because it gives both businesses the chance to organize the new organization how they see fit.

Registration of Joint Ventures as Limited Liability Partnerships

If the goal is to register a joint venture as an LLP, there are two ways to go about it:

Either a new LLP is formed with capital held by both businesses or parties, or one partner transfers a portion of the current LLP to the JV partner.

Contractual Agreement Used to Register Joint Ventures

When a joint venture (JV) is part of a contract, the parties work together with independent parties rather than stockholders or partners. In this case, the contract or agreement is the legally binding element and outlines all of the obligations, rights, and responsibilities required of both the parties and third parties.

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