Document background
A Letter of Joint Venture is a crucial preliminary document used in the Indian business environment when two or more parties intend to establish a joint business venture. This document serves as a framework for future negotiations and typically precedes the more comprehensive Joint Venture Agreement. It is particularly relevant in scenarios where parties need to document their initial understanding while conducting due diligence or seeking regulatory approvals. The letter outlines essential aspects such as capital structure, management control, profit sharing, and operational responsibilities, while considering Indian legal requirements including those under the Companies Act, 2013, Foreign Exchange Management Act (FEMA), and relevant sector-specific regulations. It's commonly used in cross-border ventures, technical collaborations, and domestic partnerships where parties need to establish clear intentions before committing to a full-fledged joint venture.
