Joint Venture Agreement - Template, Sample Form Online Pro · IN-law
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JOINT VENTURE AGREEMENT
This Joint Venture Agreement ("Agreement") is made and executed on this ________ at ________, ________:
BY AND BETWEEN
________, ________, bearing PAN ________ and GSTIN ________, residing at / having its registered office at ________ (hereinafter referred to as the "First Party" or "Party 1", which expression shall, unless repugnant to the context or meaning thereof, mean and include its legal heirs, executors, administrators, successors and permitted assigns);
AND
________, ________, bearing PAN ________ and GSTIN ________, residing at / having its registered office at ________ (hereinafter referred to as the "Second Party" or "Party 2", which expression shall, unless repugnant to the context or meaning thereof, mean and include its legal heirs, executors, administrators, successors and permitted assigns).
The First Party and the Second Party are hereinafter collectively referred to as the "Parties" and individually as a "Party".
WHEREAS:
A. The Parties are desirous of associating together, on the terms and conditions set out herein, to jointly carry on the following business:
________
(hereinafter referred to as the "Business" or the "Joint Venture");
B. This Agreement is intended to be a contractual (unincorporated) joint venture and records the relationship between the Parties and their respective rights, duties and obligations.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth herein, and for other good and valuable consideration the receipt and sufficiency whereof are hereby acknowledged, the Parties hereto, intending to be legally bound, covenant and agree as follows:
§ 1. Definitions and Interpretation
1.1. Affiliate: any entity that directly or indirectly Controls, is Controlled by, or is under common Control with, another entity;
1.2. Authorised Persons: a Party's, and its Affiliates' (if applicable), officers, directors, members, partners, and any of their employees, consultants, agents, representatives or professional advisers;
1.3. Business Day: a day other than a Saturday, Sunday or a bank or public holiday in the State in which the Joint Venture operates;
1.4. Commencement Date: the date on which the Joint Venture shall commence, being ________;
1.5. Contract Year: each consecutive period of twelve (12) months commencing from the Commencement Date;
1.6. Control: has the meaning assigned to it under Section 2(27) of the Companies Act, 2013, and "Controls" and "Controlled" shall be construed accordingly;
1.8. Know-how: inventions, discoveries, improvements, processes, formulae, techniques, specifications, technical information, methods, tests, reports, component lists, manuals, instructions, drawings, and information relating to customers and suppliers (whether written or in any other form and whether confidential or not);
1.9. Losses: all damages, liabilities, demands, costs, expenses, claims, actions and proceedings (including legal and other professional fees, costs and expenses, fines, penalties and interest);
1.10. GST Act: the Central Goods and Services Tax Act, 2017, the applicable State Goods and Services Tax Act, the Integrated Goods and Services Tax Act, 2017, together with all rules, amendments and re-enactments thereto;
1.11. DPDP Act: the Digital Personal Data Protection Act, 2023, and the rules made thereunder, as amended from time to time;
1.12. In this Agreement, unless the context otherwise requires, the singular includes the plural and vice versa, references to a statute include any subordinate legislation and any amendment or re-enactment thereof, and clause headings are for convenience only and shall not affect interpretation.
§ 2. Term and Background to the Joint Venture
2.1. The Joint Venture shall commence on ________ and shall continue in force until terminated in accordance with § 8 (Termination) of this Agreement.
2.2. Party 1 is engaged in the following business:
________
2.3. Party 2 is engaged in the following business:
________
2.4. The Parties have agreed to enter into a joint venture to carry on the following Business:
________
2.5. The Parties envisage that the Joint Venture will leverage and benefit from the combined technical, financial and managerial expertise and strengths of the Parties.
§ 3. Ownership and Profit Sharing
3.1. The Joint Venture shall be owned by the Parties, and the profits and losses thereof shared, in the following proportions:
3.1.1. Party 1: ________%
3.1.2. Party 2: ________%
3.2. The net profits and losses of the Joint Venture shall be computed and distributed at the intervals set out below, after meeting all expenses, statutory dues and provisions:
________
§ 4. Obligations of the Parties
4.1. During the term of this Agreement, Party 1 shall have the following obligations:
________
4.2. During the term of this Agreement, Party 2 shall have the following obligations:
________
4.3. Each Party shall, in the conduct of the Business, comply with all applicable laws, rules and regulations, including the Income-tax Act, 1961, the GST Act, applicable labour codes and the DPDP Act.
§ 5. Representations and Warranties
5.1. Each Party represents and warrants to the other Party that:
5.1.1. it has the requisite power and authority to enter into this Agreement and any other agreement required for the operation of the Joint Venture, and to grant the other Party the rights (if any) contemplated herein;
5.1.2. this Agreement has been duly executed by it or on its behalf, and constitutes its legal, valid and binding obligation enforceable in accordance with its terms, in conformity with the Indian Contract Act, 1872;
5.1.3. the execution, delivery and performance by it of this Agreement does not and will not (a) in the case of a body corporate, breach or constitute a default under its constitutional documents, or (b) result in a breach of, or constitute a default under, any agreement to which it is a party or by which it is bound, or (c) result in the creation of any lien, charge or encumbrance upon any of its assets or properties.
§ 6. Capital Contributions and Bank Accounts
6.1. Each Party agrees to contribute the following capital to the Joint Venture:
6.1.1. Party 1 shall contribute:
________
6.1.2. Party 2 shall contribute:
________
6.2. The Parties shall jointly open and operate a dedicated bank account in the name of ________, to be operated in the manner set out below:
________
6.3. Proper books of account shall be maintained in respect of the Joint Venture and shall be audited annually by an independent chartered accountant appointed jointly by the Parties.
§ 7. Additional Capital
If at any time additional capital is required by the Joint Venture, the same shall be contributed by the Parties in proportion to their respective ownership in the Joint Venture, unless otherwise agreed in writing.
§ 8. Termination
8.1. This Agreement may be terminated by either Party giving a minimum of thirty (30) Business Days' prior notice in writing to the other Party.
8.2. Either Party may terminate this Agreement at any time by notice in writing to the other Party if:
8.2.1. the other Party commits a material breach of this Agreement that is not remediable;
8.2.2. the other Party commits a material breach that is not remedied within fourteen (14) days of receiving written notice of such breach;
8.2.3. the other Party fails to pay any amount due under this Agreement on its due date and such amount remains unpaid within fourteen (14) days after notification that the payment is overdue; or
8.2.4. any consent, license or authorisation held by the other Party is revoked or modified such that it is no longer able to comply with its obligations or receive any benefit to which it is entitled.
8.3. Either Party may terminate this Agreement by notice in writing if the other Party:
8.3.1. ceases to carry on all or a significant part of its business, or indicates an intention to do so;
8.3.2. is unable to pay its debts within the meaning of the Insolvency and Bankruptcy Code, 2016;
8.3.3. becomes the subject of any insolvency resolution process or voluntary arrangement;
8.3.4. has a receiver, resolution professional, liquidator, administrator or similar officer appointed over all or any part of its undertaking, assets or income;
8.3.5. has a resolution passed or an order made for its winding up; or
8.3.6. has a petition presented to any court or Tribunal for its winding up or insolvency resolution.
8.4. Either Party may terminate this Agreement by giving not less than sixty (60) days' notice in writing if the other Party undergoes a change of Control without the prior written consent of the other Party.
8.5. If a Party becomes aware of any event or circumstance that may entitle the other Party to terminate this Agreement under this clause, it shall immediately notify the other Party in writing.
8.6. Termination or expiry of this Agreement shall not affect any accrued rights and liabilities of either Party up to the date of termination.
§ 9. Consequences of Termination
9.1. Upon termination of this Agreement:
9.1.1. where a Party ("First Party") is in possession of any equipment, materials, documents, intellectual property, data or other information ("Items") that are the property of the Joint Venture or of the other Party ("Second Party"), the First Party shall promptly return all Items to the Second Party, or destroy them if so directed by the Second Party;
9.1.2. the assets and liabilities of the Joint Venture shall be realised, discharged and distributed among the Parties in proportion to their respective ownership, after settlement of all statutory dues and third-party obligations.
§ 10. Confidentiality
10.1. The Parties acknowledge that in connection with this Agreement they may have access to information that is confidential and/or commercially valuable to the other Party ("Confidential Information").
10.2. Each Party may be both a "Receiving Party" and a "Disclosing Party", and the terms of this Agreement shall apply to a Party in each capacity as the context requires.
10.3. Confidential Information may include, but is not limited to:
10.3.1. information of whatever nature relating to the Business or to another Party;
10.3.2. any information derived from such information; and
10.3.3. any copy of any Confidential Information.
10.4. Confidential Information does not include information which:
10.4.1. was lawfully known to or in the possession of the Receiving Party before disclosure, otherwise than in breach of any obligation of confidentiality;
10.4.2. is or becomes publicly available through no fault of the Receiving Party;
10.4.3. is provided to the Receiving Party without restriction by a third party not in breach of any confidentiality obligation;
10.4.4. is provided by the Disclosing Party and marked "Non-Confidential"; or
10.4.5. is required to be disclosed by law or regulation, to the minimum extent necessary and after prior consultation with the Disclosing Party.
10.5. In relation to Confidential Information, the Receiving Party shall: (a) keep it confidential and secret; (b) use it solely for the purpose of the Business in accordance with this Agreement; and (c) not disclose it to any third party except advisers under a duty of confidentiality who need it for the Business.
10.6. Where any Confidential Information includes personal data, each Party shall comply with the DPDP Act and process such personal data only for lawful and notified purposes.
10.7. The obligations under this clause shall survive the termination or expiry of this Agreement.
§ 11. Non-Compete
11.1. Each Party agrees that, for the Time Period after it ceases to participate in the Joint Venture, and within the Geographical Area, it shall not, directly or indirectly, in any capacity whatsoever:
11.1.1. engage in any business or project that is the same as, similar to, or in competition with the Business of the Joint Venture;
11.1.2. solicit, hire or attempt to hire any other Party or any employee or staff working in the Joint Venture; or
11.1.3. solicit any customers or clients of the Joint Venture.
11.2. The "Time Period" means, from the date the Party ceases to participate in the Joint Venture: ________
11.3. The "Geographical Area" means:
________
11.4. The Parties acknowledge that the restrictions in this clause are reasonable and necessary to protect the legitimate business interests of the Joint Venture, and shall be enforceable to the extent permitted by Section 27 of the Indian Contract Act, 1872. The obligations under this clause shall survive termination or expiry of this Agreement.
§ 12. Intellectual Property
12.1. In connection with its participation in the Joint Venture, each Party may generate, create, contribute to, write or produce intellectual property ("Project Intellectual Property").
12.2. Project Intellectual Property includes, but is not limited to:
12.2.1. information, ideas, innovations, developments, improvements, inventions, discoveries, plans, reports, drawings, specifications, advice, analyses, designs, methodologies, code, artwork or any other intellectual property;
12.2.2. intellectual property resulting in any way from work performed for or on behalf of the Joint Venture;
12.2.3. intellectual property whether generated directly, indirectly, independently or in cooperation with others, during or outside ordinary working hours, and at any location;
12.2.4. intellectual property resulting from the use of the resources or assets of the Joint Venture; and
12.2.5. intellectual property relating in any other way to the Business.
12.3. Unless otherwise expressly agreed in writing, nothing in this Agreement creates any transfer or assignment of Intellectual Property Rights in any Project Intellectual Property.
12.4. Unless otherwise expressly agreed, each Party shall retain all Intellectual Property Rights in any Project Intellectual Property it generates.
12.5. The obligations under this clause shall survive termination or expiry of this Agreement.
§ 13. Indemnity
13.1. Each Party (the "Indemnifying Party") shall, to the extent that a claim does not arise from the negligence or wilful default of the other Party or its Authorised Persons, indemnify, keep indemnified on demand, and hold harmless the other Party (the "Indemnified Party") and its Authorised Persons from and against all Losses arising out of or in connection with:
13.1.1. any act or omission of the Indemnifying Party or its Authorised Persons in breach of this Agreement;
13.1.2. any breach of the warranties set out in this Agreement; and
13.1.3. any third-party claim relating to the activities of the Joint Venture to the extent it relates to any act, neglect or default of the Indemnifying Party or its Authorised Persons.
13.2. Where an indemnity payment is itself taxable in the hands of the Indemnified Party, the amount shall be grossed up so that the Indemnified Party receives, net of taxes, the amount it would have received had no such tax been levied.
13.3. The following procedure shall apply to third-party claims:
13.3.1. as soon as reasonably practicable after the Indemnified Party receives notice of any qualifying third-party claim ("TP Claim"), it shall give written notice to the Indemnifying Party. Within thirty (30) days (but no later than ten (10) days before any response is due), the Indemnifying Party may assume control of the action and settlement by giving a Notice of Election; the Indemnified Party shall provide reasonable assistance at the Indemnifying Party's cost;
13.3.2. the Indemnified Party shall not make any admissions or agreements regarding a TP Claim without the Indemnifying Party's prior written consent (save where required by court order or governmental regulation);
13.3.3. if the Indemnifying Party does not deliver a Notice of Election, fails to defend in time, or ceases to defend, the Indemnified Party may defend the claim as it deems appropriate, provided the Indemnifying Party is not prejudiced thereby.
§ 14. Limitation of Liability
14.1. The extent of the Parties' liability under or in connection with this Agreement (whether in tort, contract or otherwise) shall be as set out in this clause.
14.2. Notwithstanding anything to the contrary, a Party's aggregate liability with respect to any and all claims arising out of or relating to this Agreement shall not exceed ________.
14.3. Neither Party shall be liable for any consequential, indirect or special loss, including loss of profit, loss of or corruption to data, loss of contract, loss of commercial opportunity, or loss of goodwill.
14.4. Except as expressly stated, all warranties and conditions implied by statute, common law or otherwise are excluded to the extent permitted by law.
14.5. Nothing in this Agreement shall limit or exclude liability for:
14.5.1. death or personal injury caused by negligence or wilful misconduct;
14.5.2. fraud or fraudulent misrepresentation; or
14.5.3. any other liability that cannot be excluded or limited by applicable law.
§ 15. Relationship of the Parties
15.1. Nothing in this Agreement shall be construed as constituting a partnership under the Indian Partnership Act, 1932, or an agency or employment relationship between the Parties, except to the limited extent expressly set out herein in relation to the Joint Venture.
15.2. Except as expressly provided, no Party shall have any authority to act for, or incur any obligation on behalf of, the other Party, nor shall any Party hold itself out as having such authority.
15.3. Each Party shall be responsible for its own costs and expenses incurred in performing its obligations, unless otherwise agreed in writing.
§ 16. Costs and Expenses
16.1. Except as otherwise expressly provided, each Party shall bear its own legal, accounting and other costs incurred in connection with the negotiation, preparation, execution and performance of this Agreement.
16.2. Any costs and expenses incurred jointly in connection with the Joint Venture shall be shared by the Parties in proportion to their respective ownership, unless otherwise agreed in writing.
16.3. The stamp duty payable on this Agreement, as determined under the applicable Stamp Act, shall be borne by ________.
§ 17. Taxes
17.1. Each Party shall be solely responsible for the payment of its own taxes, including income tax under the Income-tax Act, 1961, arising out of its participation in the Joint Venture and the receipt of profits therefrom.
17.2. All amounts payable under this Agreement are exclusive of any applicable taxes, including tax payable under the GST Act, which shall, where applicable, be paid in addition by the Party liable to make payment, subject to receipt of a valid tax invoice.
17.3. Each Party shall comply with applicable tax deduction and withholding obligations under the Income-tax Act, 1961.
§ 18. Exclusivity
18.1. Each Party (the "Representing Party") represents to the other that:
18.1.1. upon signing this Agreement, it shall terminate any discussions or negotiations with any party other than a Party to this Agreement ("Third Party") relating to the Joint Venture or the Business ("Third Party Discussions");
18.1.2. while this Agreement is in effect, it shall not, directly or indirectly:
18.1.2.1. engage in any Third Party Discussions;
18.1.2.2. invite, encourage, seek or solicit any Third Party to engage in Third Party Discussions;
18.1.2.3. respond to any solicitation from a Third Party (except to reject it); or
18.1.2.4. enter into any agreement, memorandum of understanding, letter of intent or other arrangement with any Third Party in relation to Third Party Discussions;
18.1.3. it shall ensure that its Authorised Persons also comply with this clause.
18.2. For clarity, "Third Party Discussions" do not include discussions undertaken in good faith to pursue the Business in the spirit of this Agreement.
§ 19. Force Majeure
19.2. If a Force Majeure Event continues for more than thirty (30) days, the Parties shall mutually agree on the future course of action. If it continues for ninety (90) days, either Party may terminate this Agreement by written notice.
§ 20. Non-Solicitation
20.1. Each Party agrees that, during the term of this Agreement and for a period of two (2) years after its termination, it shall not (nor shall any person forming part of it):
20.1.1. directly or indirectly hire or attempt to hire (whether as employee, consultant, advisor, independent contractor, partner or otherwise) any employee or consultant of the other Party; or
20.1.2. directly or indirectly approach, canvass, solicit or entice any employee, vendor, customer, consultant, contractor or agent of the other Party.
20.2. A Party breaching this clause shall be liable to pay to the other Party liquidated damages of ________, which the Parties agree is a genuine pre-estimate of loss in accordance with Section 74 of the Indian Contract Act, 1872.
§ 21. Severability
If any provision of this Agreement is held to be invalid, illegal or unenforceable, such invalidity shall not affect the remaining provisions, and this Agreement shall be construed as if such provision had never been contained herein. Any invalid provision shall be replaced with a valid, enforceable provision that most nearly gives effect to the original intent.
§ 22. Entire Agreement
This Agreement constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior negotiations, correspondence, agreements and understandings.
§ 23. No Other Rights Granted
Nothing in this Agreement grants any rights under any patent, copyright or other Intellectual Property Rights of one Party to the other, nor any rights in the other Party's Confidential Information, except the limited right to use such Confidential Information in connection with the Business.
§ 24. Amendments
Any change, alteration, amendment or modification to this Agreement must be in writing and signed by the authorised representatives of both Parties.
§ 25. Dispute Resolution
25.1. Any dispute arising out of or in connection with this Agreement shall, as far as possible, be settled amicably between the Parties, failing which the following shall apply.
25.2. Any such dispute shall be referred to arbitration by a sole arbitrator to be appointed jointly by the Parties.
25.3. The arbitration shall be conducted at ________ in accordance with the Arbitration and Conciliation Act, 1996, or any statutory re-enactment or modification thereof for the time being in force. The language of arbitration shall be English.
25.4. The arbitral award shall be final and binding and may be enforced as a decree of court.
25.5. Subject to the above, the competent courts at ________, ________ shall have exclusive jurisdiction over all matters arising hereunder.
25.6. The Parties shall keep the arbitration proceedings and the award confidential.
25.7. If a Party employs attorneys to enforce any rights under this Agreement, the prevailing Party shall be entitled to recover reasonable costs and attorneys' fees.
§ 26. Notices
26.1. All notices and communications under this Agreement shall be in writing and shall be deemed duly given when delivered by hand, sent by registered post or recognised courier, or sent by email to the addresses set out in the recitals to this Agreement.
26.2. Either Party may change its address for notices by giving the other Party ten (10) days' prior notice.
§ 27. Governing Law
This Agreement and all matters arising out of or relating to it shall be governed by and construed in accordance with the laws of India.
§ 28. Conflicts Within the Agreement
28.1. In the event of any conflict or inconsistency between parts of this Agreement, the following descending order of priority shall apply: (i) the terms in the main body of this Agreement; and (ii) any Schedules.
28.2. Subject to the above, later versions of documents shall prevail over earlier ones in the event of conflict.
§ 29. Announcements
29.1. Subject to § 29.2, no announcement or public disclosure concerning this Agreement shall be made by a Party without the prior written consent of the other Party (such consent not to be unreasonably withheld or delayed).
29.2. If a Party is required by law, court or competent authority to make a disclosure, it may do so, provided it: (i) notifies the other Party as soon as reasonably practicable to the extent permitted; (ii) consults the other Party so far as practicable; and (iii) considers the other Party's reasonable requirements as to form and content.
§ 30. Further Assurance
Each Party shall, at the request and cost of the other Party, do all acts and execute all documents necessary to give full effect to this Agreement.
§ 31. Assignment
No Party may assign, subcontract or encumber any right or obligation under this Agreement, in whole or in part, without the other Party's prior written consent, such consent not to be unreasonably withheld or delayed.
§ 32. Set-Off
Except as expressly provided, each Party shall pay all sums owed under this Agreement without any set-off, counterclaim, deduction or withholding, save as required by law.
§ 33. Equitable Relief
Each Party recognises that any breach or threatened breach of this Agreement may cause the other Party irreparable harm for which damages may not be an adequate remedy. Accordingly, each Party shall be entitled to the remedies of specific performance, injunction and other equitable relief without proof of special damages, in addition to any other remedies available.
§ 34. Waiver
34.1. No failure, delay or omission by either Party in exercising any right, power or remedy shall operate as a waiver thereof, nor preclude any future exercise of it.
34.2. No single or partial exercise of any right, power or remedy shall prevent any future exercise of it or of any other right.
34.3. A waiver of any term or breach shall only be effective if in writing and signed by the waiving Party, and only for the instance and purpose given.
IN WITNESS WHEREOF the Parties have executed this Agreement on the day, month and year first hereinabove written.
___________________________
________ (First Party)
Name and Designation of Signatory: ________
___________________________
________ (Second Party)
Name and Designation of Signatory: ________
Signed in the presence of the following witnesses:
____________________________________________
Witness 1
Name: ________
Address: ________
_____________________________________________
Witness 2
Name: ________
Address: ________
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