how can a joint venture be formed???

Dear Brinda,

The answer provided by Muskaan is correct and also you may refer to the below summarised points on the formation of the joint ventures.

The following are the ways in which a joint venture can be formed:
a. A foreign company and a local company can join hands to form a new business enterprise.
b. A foreign company can buy a portion of equity shares of a local company.
c. A local company can acquire a portion of equity in another existing local company.

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A joint venture company can be

formed in any of the following ways:(i) Two parties (individuals orcompanies), incorporate acompany in India. Business of oneparty is transferred to a newcompany. For consideration ofsuch transfer, shares are issued bythe new company and subscribedby the above party. Theothersubscribes for the shares in cash;(ii) The above two parties subscribeto the shares of the joint venturecompany inagreed proportion, incash and start a new business;(iii) Promoter shareholder of anexisting Indian company andanother party which may be eitheran individual or a company maycollaborate to jointly carry on thebusiness of that company. Theother party may be non-residentor resident and may take upshares of the company throughpayment in cash.All joint venturesin India require governmentapprovals if a foreign partner or aNon-Resident Indian(NRI) isinvolved. The approval can beobtained either from the ReserveBank of India or Foreign InvestmentPromotion Board (FIPB), dependingupon particular circumstances.PRIVATE, PUBLIC AND GLOBAL ENTERPRISES 71(a) If the joint venture is covered underautomatic route, then the approval ofthe Reserve Bank of India is required.(b) In other special cases not coveredunder the automatic route, a specialapproval of FIPB is required.A joint venture must be based on amemorandum of understanding signedby both the parties highlighting thebasis of a joint venture agreement. Theterms should be thoroughly discussedand negotiated to avoid any legalcomplications at a later stage.Negotiations and terms must take intoaccount the cultural and legalbackground of the parties. The jointventure agreement must also state thatall necessary governmental approvalsand licenses will be obtained within aspecified period.if u like this answer than plz.....give me a THUMS UP!!!!HOPE THIS HELPS YOU
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