Model Agreements

Joint Ventures

Joint Venture Agreement

A Checklist

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Negotiation DOs and DON'Ts     

Wise Agreement

  1. Legal Structure of the New Business

  2. Scope of Business

  3. Governing Structure

    • Percentage ownership

    • Cooperation at the policy and operating level

  4. Investment

    • Form of investment (know-how, technology, brand equity, equipment, land, cash and so on)

    • Total investment and/or capital contribution

  5. Production

    • Goods and/or services to be produced and/or provided

    • Location of production facilities

    • Required production capacity

    • Required office space

    • R&D budget

    • Quality management and standards

  6. Management and Staffing

    • The CEO (should come from one of the parents but be able to win both parents' confidence)

    • Board of Directors (total number, number of appointees of each parent, frequency of meetings)

    • Governance policies (regulatory compliance, board policies)

    • Other key positions (who appoints what members of the management team and responsibilities for each position)

    • Expatriates (legal, living and working arrangements)

    • Delegation of authority, reporting structure

  7. Technology and Intellectual Property Transfer

  8. Marketing

    • Marketing strategy

    • Office space required for and location of sales and branch offices

    • Share or products/services to be sold at the local and international market

    • Marketing budget

  9. International Business Procedures

    • Requirements for local or imported raw materials and components

    • Foreign currency requirements

    • Taxes and import duties

    • Regulatory approval process (cost, timing requirements)

  10. Contracted Services

    • Product/service development

    • Marketing support

  11. Revenue Sharing

    • Dividend policy

    • Royalties or transfer fees

  12. Accounting and Control Methods

    • Level of detail in cost accounting required

    • Information required for venture control

    • Frequency and level of detail required for accounting reports

    • Choice of auditor