Interview Questions.

Question 1. What Types Of Joint Ventures Are There?

Answer :

There are many examples of collaborations between businesses – commonplace ones are the subsequent systems where  or more people share assets and danger:

setting up a separate Joint Venture company in which each birthday celebration has a shareholding and might appoint directors to perform a selected (and often finite) task together with improvement of a brand new product
contractual arrangements such as stepping into a distribution settlement
forming a partnership
merging  organizations.
The rest of this newsletter covers the primary structure above where everybody in the Joint Venture has a shareholding and appoints directors.

Question 2. Who Will Be Part Of The Joint Venture?

Answer :

The humans contributing the assets to the Joint Venture, or JV, will all be parties to the Joint Venture Agreement.

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Question 3. Will The Joint Venture Company Or Other Vehicle Itself Be A Party To The Joint Venture Agreement?

Answer :

Usually, Yes in order that shareholders can put in force against the agency.

Question 4. What Issues Do I Need To Consider When Looking For A Joint Venture Partner?

Answer :

Look for a JV accomplice with complementary strengths: eg a software product which you can distribute via the Joint Venture.
Take time to apprehend absolutely what your companion’s motive and targets can be from the JV.  You will need that allows you to agree objectives that match both of you.
You may also need to attain settlement on a whole variety of other troubles as well as the JV settlement.
Consider at the outset what takes place when the JV involves an stop. This  could make it hard to collaborate with a competitor or with a business that is possibly to compete with you within the future.
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Question 5. How Do I Negotiate Heads Of Terms?

Answer :

The Heads Terms document sets out the main concepts for the Joint Venture and the stairs and documents required to get it set up. Read greater about negotiating Heads of Terms Agreements.

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Question 6. What Is The Best Way To Structure A Joint Venture?

Answer :

Usually the JV events shape a separate constrained organisation for the Joint Venture  so every has constrained legal responsibility (up to amount of proportion capital invested) should the Joint Venture  now not paintings and emerge as insolvent.
However the tax role need to be assessed first of all because shifting considerable property into the Joint Venture can have undesirable tax consequences. You have to take a look at along with your tax advisers.
Sometimes a partnership or a constrained legal responsibility partnership is used instead.
If you do now not require control involvement within the  Joint Venture, it can be excellent to apply contractual preparations rather than to create a separate Joint Venture  entity.
For instance, a designer should truly license his or her highbrow assets rights within the layout to another commercial enterprise to exploit in go back for royalty payments. You need to discover what other agreements are wanted among the Joint Venture and the shareholders – eg licences to apply software, brand names, premises, secondment of team of workers etc.
Question 7. What About Financing Joint Ventures?

Answer :

You and your Joint Venture partner will need to agree:

What share (if any) of the preliminary finance will the parties themselves provide and what kind of could be provided from outside assets.
If 1/3 birthday party funding is being sought, what security and/or recourse to the parties themselves will the lender(s) require.
Will the events’ initial investment be in coins and/or through contributing belongings.
If the investment will be through debt rather than fairness, or vice versa.
What arrangements will there be for investment, on a continuing foundation:

 the running capital necessities
 losses incurred with the aid of the joint project; and/or
 development and expansion expenses
Will every celebration be required (or entitled) to make a contribution to continuing calls for investment, pro-rata to its original funding or in any other case
What happens if one of the parties defaults.
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Question eight. What Assets Can Be Put Into Joint Ventures?

Answer :

Any asset can be put right into a Joint Venture e.G. Personnel, highbrow assets, offices, customers and suppliers and their related contracts.

Contributions can be by means of outright transfer, or through a lease or licence to the Joint Venture for a fixed or indefinite time period. Separate documents might be required for the switch of every asset to the Joint Venture .

The contributed assets will want to be valued and agreed with the Joint Venture associate.

You will need to agree if all contributions of property may be made simultaneously, in case you need any regulatory approvals or is of the same opinion third parties (which include lessors, licensors and creditors) or how required for any transfer. If not, the availability of any or all precise asset(s) can be a circumstance precedent to the status quo of the Joint Venture.

Question 9. What Legal Agreements Are Needed To Set Up A Joint Venture?

Answer :

If you are forming a new Joint Venture  enterprise, a Joint Venture Agreement and the new business enterprise’s articles of association are vital.

Points that can be blanketed in these documents or in separate agreements include:

the financing arrangements for the Joint Venture
agreements now not to compete with the Joint Venture
preparations for licensing or moving intellectual belongings in inventions, brands, designs or copyright works which includes plans or manuals to the Joint Venture
agreements on any services or resources you'll offer to the Joint Venture
confidentiality agreements
how any disputes can be dealt with
how the companions can go out the Joint Venture
any agreements on the way to retain after the Joint Venture is terminated.
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Question 10. What Is A Shareholders Agreement?

Answer :

A Shareholders Agreement may be another name for the Joint Venture Agreement. It units out the settlement among the shareholders showing how they'll perform the Joint Venture, how they'll make selections and vote because the shareholders and administrators.

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Question 11. What Are The Shareholders Rights In A Joint Venture?

Answer :

The shareholders will want to agree:

How will possession of the Joint Venture may be divided and what balloting rights the parties will  have as shareholders
If there might be separate training of shares – eg due to the fact every magnificence of shares could have one of a kind possession, dividends and or balloting rights
If shares of the same magnificence could be capable of being held with the aid of more than one man or woman
If there could be any special vote casting rights attached to all or any shares
What quorum and be aware necessities will follow for shareholder meetings
if there be any quandary on possible places for shareholders’ meetings
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Question 12. What Is Minority Shareholder Protection In A Joint Venture?

Answer :

If a shareholder owns much less than say 50% of the Joint Venture it may need to defend itself in the following situations:

The majority shareholder forcing via voting on positive vital problems at shareholder conferences ( e.G. Converting the business, including new shareholders, issuing new shares, buying new agencies or selling components of the business)

Similar protections and any treatments can follow to board and/or director level balloting as well.

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Question 13. How Do We Take Profits From The Joint Venture?

Answer :

Profits from Joint Venture organizations are commonly dispensed thru dividends.

Of path, the capacity of the Joint Venture  to pay dividends will rely upon its cashflow role. Depending on the circumstances, there can also be different extra tax-powerful methods of figuring out a part of the cost of your investment inside the Joint Venture. Where a Joint Venture is dependent as a partnership, profits are automatically shared between the partners as exact within the partnership agreement. The partnership settlement should also specify what coins bills companions can take from the partnership. If there's no separate joint venture entity, there will be no want to ‘take’ earnings from the joint undertaking – the earnings will anyhow get up within your (or your Joint Venture associate’s) enterprise.

Question 14. Give The Journal Entry Under The Method Where Separate Set Of Books Is Kept When Cash Contributed Or Invested Or Paid- In-by means of Co- Ventures?

Answer :

 Joint Bank A/C  Dr                xxx 

To Respective Co-mission A/C          xxx

Question 15. What Are The Disadvantages Of Joint Venture?

Answer :

Setting unrealistic objectives that won't be completely clean in advance and not aligned to a commonplace aim.
Making negative tactical choices due to a misunderstanding of the roles of each agency.
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Question 16. What Is The Difference Between Joint Venture And Consignment?

Answer :

The events to a joint challenge are referred to as co- ventures while the parties to a consignment are referred to as consignor and consignee.
In a joint undertaking all the co- ventures endure the threat while in consignment handiest the consignor bears the danger.
Question 17. What Is The Difference Between Joint Venture And Partnership?

Answer :

Joint Venture involves  or extra agencies becoming a member of collectively in enterprise. In partnership, it's far folks who be part of together for a mixed challenge.

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Question 18. Name The Accounts Prepared Under The Method Where No Separate Set Of Books Is Kept ?

Answer :

Joint Venture Account 
Other Co- ventures Account
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Question 19. What Is Co- Ventures Account?

Answer :

This is the capital account of the task relating to assignment. This account is credited by using the capital contributed by using the ventures, items furnished by means of them from their personal stock, fees made individually with the aid of them etc whereas this account is debited for any withdrawal or any asset taken from the task.

Question 20. What Is Joint Venture Account?

Answer :

This account represents the results of the commercial enterprise, this is, income or loss. This account is debited by the cost of goods, expenses,items provided by the ventures and so on and are credited via sale proceeds, unsold stock, stock taken via ventures and so on.

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Question 21. Explain The Meaning Of Memorandum Joint Venture Account?

Answer :

It is prepared through memoranda i.E. Transactions are without delay entered inside the Memorandum Joint Venture Account. It is simply a announcement showing income or loss on undertaking.

Question 22. What Is Joint Venture?

Answer :

A joint undertaking is a business association wherein  or greater parties comply with pool their assets for the purpose of accomplishing a specific task.This mission may be a new undertaking or another business interest.The mission is its personal entity, separate and aside from the player's different business pastimes.