Joint Venture and Shareholder Agreement-230313 - ICSI

[Pages:16]Joint Venture and Shareholders' Agreements

March 23, 2013

Shivpriya Nanda Partner

J. Sagar Associates advocates & solicitors

Delhi | Gurgaon | Mumbai | Bangalore | Hyderabad

Why Joint Ventures?

? Regulatory requirements which mandate that a foreign shareholder can only hold a specified percentage of equity

? Synergies for reasons of:

Technology Brands/trademarks Market Reach Growth prospects Local knowledge Availability of Assets Availability of approvals/licenses Hedging of risks associated with a new market

2

Types of Joint Ventures

? Greenfield ? Variation of Greenfield which may be based on

acquisition of assets or Business from the Joint Venture Partner ? Brownfield

3

Getting Started

? Non binding LoI or MoU setting out:

Principal terms such as equity percentages Broad price range and/or funding requirements Identify the Assets/Business to be transferred Non-compete Drop Dead Date

? Non Disclosure Agreement

4

Getting Started

? Due Diligence:

Background Check of the Joint Venture Partner In case Assets or Business are to be acquired by the

Joint Venture then a full scale due diligence of all aspects of the Business/Assets

? Due Diligence is a critical aspect both for decision to go ahead ad for the transaction documents

5

Getting Started

? Depending upon the contours of the transaction identification of transaction documents that may be needed :

Joint Venture/Shareholders' Agreement Share Purchase/Share Subscription Agreement Technology License Agreement Trademark License Agreement Employment Agreement Asset Purchase/Business Transfer Agreement Supply or sale Agreement Lease Agreement

6

Key Terms of Joint Venture/Shareholders' Agreement

? Scope of the Joint Venture

Products/Sector/Project Definition of `Business of the Joint Venture

Company" Agreed name and trademarks to be used by the

Company

? Conditions Precedent to Closing and Closing Process

? Role of each Party

What does each Party bring to the table Agreements that each Party is required to execute

with the Joint Venture Company

7

Key Terms of Joint Venture/Shareholders' Agreement

? Shareholding Pattern:

Authorized Share Capital Types of Securities along with rights associated with

them Shareholding percentage of each Party

? Funding:

According to agreed business plan Order of priority in terms of debt vs. equity Agreed debt equity ratio Consequence of default

8

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download