CS Executive · Setting Up of Business, Industrial and Labour Laws · Business Collaborations
Rohan Auto Ltd. and a Japanese company set up a JV to share technology for a defined period, with each keeping its own separate business and no new entity being formed. The relationship is governed entirely by a written agreement. This JV is best described as:
It is a contractual or unincorporated joint venture. The two companies collaborate purely through a written agreement, keep their separate businesses and create no new entity. An equity JV would need a jointly owned company, and a wholly owned subsidiary or LLP also involves a separate entity.
- AAn equity (incorporated) joint venture
- BA contractual or unincorporated joint ventureCorrect
- CA wholly owned subsidiary
- DA limited liability partnership
Explanation
Where parties collaborate under an agreement without forming a new entity and continue their separate businesses, it is a contractual (unincorporated) JV. An equity JV needs a jointly owned entity, a WOS is owned by one parent, and an LLP is a separate registered entity.
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