Company Analysis : Joint Venture Agreements

Joint Stock Companies- A Joint Stock Company is a company that has stocks that are available to be shared by different shareholders. Joint Stock Companies were formed around the 1600s by the English parliament after the amount of money spent in the battle against the Spanish for North America. This made it possible to gather money to colonize.

Since the decision in Salomon case, the separation between members and a company has never been doubted. Theoretically, Salomon’s case was a good decision where become the motivating force of capitalism to invest to the company. This is undoubtedly good as the investors were an important source of fund to the company. However this doctrine is problematic in reality as it brings the benefit of incorporation to small sole enterprises. Salomon’s case has provided a flaw to the subscribers of a company to avoid from their liability. Although the problem of Salomon’s principle does exist, however, it has stood the test of time and remained various types of practical functions for the commercial market such as financing methods and specialised

A foreign investor may enter into a joint venture by combining with a national of a host country to create a new entity or by acquiring a portion of an existing local entity.

Corporations nowadays partner with each other because separately those firms have internals needs they cannot fulfill by themselves (Mohr & Sengupta, 2002). When businesses join in cohesive collaboration, each party begins to absorb each other’s knowledge and skills internally to acquire strengthen in marketplace (Mohr & Sengupta, 2002). All in all, inter-firm learning brings success in business partnerships if organizations select a project that offer innovative benefits that peak each partner’s interests, selecting a partner which suits the company’s style of the business, and managing joint projects which lead to developing a competence in working with others (Dickson, Coles, & Lawton Smith, 1997).

“A joint venture is a legal organization that takes the form of a short term partnership in which the persons jointly undertake a transaction for mutual profit. Generally each person contributes assets and share risks. Joint ventures are also widely used by companies to gain entrance into foreign markets.” (Cornell University Law School) In way to engage ones customers with new stuff, joint venture has become paramount in satisfying customers with variety and also infuse modernization and advance technology. An example is the introduction of the popular video streaming website “HULU” created by a joint venture in the year 2008 by NBC Universal Television Group, Fox Broadcasting Company and the Disney –ABC Television Group. This venture

In closely held unlisted companies, shareholders agreements reserve key decisions for the shareholders and make all management information available to investors. In doing so, the agreements remove agency risk. However, the price is an increase the

The shareholders agreement, company constitution and a range of supplier contracts, finance documents and government agreements are all closely negotiated and tightly interlinked with each other. As a result, it is near impossible to change these arrangements over the 20 to 50

The concept of a company being a separate legal entity is the most striking illustration in separating the company from its owners. A paramount principle of corporate law is that no shareholder or member of a company is made liable for the obligations incurred by such incorporations A company is different from its members in the eyes of law. In continuations to this the opposite also holds true in the sense that neither can the company be held liable for the acts of its members. It is a fundamental distinction that a company is distinct from its members.

“Is any sick among you? let him call for the elders of the church; and let them pray over him, anointing him with oil in the name of the Lord” (James 5:14). If I were to run this company from a Christian worldview I believe that they are currently doing the right thing. I believe this is extremely important. Often because we are distracted with our own minuscule issues we

Other shareholders in a company likewise have limited liability, therefore no risk of personal loss so in the event of company failure, company law limits their personal liabilities so even though this benefits the shareholders the ordinary people see the result is an economy is run by shareholders of companies whose management have negligible direct personal accountability or loss if those companies should fail. Consequently, the ethics of that economy become questionable if the protagonists do not face the risk of unrestricted personal loss. The Salomon decision allowed, with full agreement to the companies act, sole traders and shareholders to have limited liability. The establishment of one-man companies under the Companies Act was solidified by this case. It now became of no relevance if shareholders are independent of one another, interdependent, dummy shareholders or nominees for the controlling shareholders; that is to say, the company was not an agent for its shareholders.

Out of the various reforms tried to be brought about by the Act, one of the main reform for the protection of investors is provision that restrains the interested shareholders from voting on the resolutions at shareholders meeting. These resolutions falling in this category would be one in which they are interested parties or dealing with most related party transactions. Provisions related to these were first time recommended in 1999 report . However even after referring to these as essential corporate governance practise, the Irani Commettee did not recommend to enact legislation on this issue. After 15 years this recommendation of Ministry of Corporate affairs has found its way in the new Act under section 188 which

To reach an agreement with the time of the joint venture, we can create the joint venture for

The principals (the shareholders) have to find ways of ensuring that their agents (the managers) act in their interests.

Two firms may come together with the sole aim of developing a solution. In this case, they bring their synergies together to achieve the goal. This speeds up product development and makes the venture less expensive. Where the cost of product development is very high, a joint venture would reduce the risk and cost.

“The approach of the how international joint venture makes, it would to ready us to determine how we can achieve the commercial objective without the compromising the shareholder interests. We need to be understanding of this relationship between the Cooperate and capital control, implication of accounting, for achieving the vote right we need to how many percentage minimum. Some aspect of regarding debt, alternative of capital contribution.