CS Executive · Setting Up of Business, Industrial and Labour Laws · Business Collaborations
Sundaram Engineering (India) and a German firm wish to run a manufacturing JV where each partner holds shares, the venture has a separate legal personality and its liability is limited to capital contributed. Which structure suits these needs?
An incorporated joint venture company fits. The partners hold shares in a separate legal entity, and their liability is limited to the capital they contributed. A contractual JV creates no separate entity, while proprietorships and general partnerships do not give limited liability.
- AAn unincorporated contractual JV under an agreement
- BAn incorporated joint venture company with the partners as shareholdersCorrect
- CA sole proprietorship held by the Indian partner
- DA general partnership where partners have unlimited liability
Explanation
An incorporated JV is a separate company in which the partners hold shares, giving separate legal personality and limited liability. A contractual JV creates no separate entity. A proprietorship and a general partnership either lack separate personality or expose owners to unlimited liability.
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