What is a joint venture?
A joint venture is an arrangement in which two or more persons carry on a defined project and share its control and its result. Indian law does not list a joint venture as a kind of company. The parties choose a contract, a partnership, an LLP, or a company.
What is the arrangement?
The agreement names the project, what each person contributes, who decides, how profit is shared, and how a person leaves. Those terms bind the parties. They do not, by themselves, incorporate anything. How this differs from a firm that carries on business in common is on the comparison page.
Which legal form can it use?
| Form | What the parties get |
|---|---|
| Contract only | No new legal person. Each party keeps its own liabilities except as the contract shifts them |
| Partnership | A firm under the Partnership Act. Partners do not have limited liability |
| LLP or company | A separate person. Formation is the LLP page or the private-company page |
What does the label not do?
It does not create a US limited liability company. It does not change the tax rate. A non-resident who takes shares in an Indian company still follows the foreign-exchange rules for that investment. The joint-venture name is not that permission.
Frequently asked questions
Four questions cover a company, a partnership, tax, and a non-resident.
Is a joint venture a company by itself?
No. The parties incorporate a company only if they choose that form. A contract alone does not create a company.
Is it the same as a partnership?
Not always. A partnership carries on a business in common. A joint venture can be limited to one project, and it can sit inside a company or an LLP instead of a firm.
Does the arrangement cut the tax rate?
No. Tax follows the form the parties actually use. A company, an LLP, and a firm are taxed under their own rules.
Is a foreign partner automatic?
No. A non-resident investing in an Indian company follows the foreign-exchange rules for that investment. The joint-venture label is not an approval.
Sources
A joint venture is the parties’ arrangement. The legal person, if they create one, is a company or an LLP. How that differs from a partnership is a separate guide.