Model Agreements:

Joint Ventures

Joint Venture Agreement

A Checklist

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

   • Technology transfer (patents, copyrights, know-how, trade secrets)

   • Specifics on technology to be transferred

   • Training and technical assistance

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