Month: September 2023

What is joint venture agreement

WHAT IS JOINT VENTURE AGREEMENT?

Joint Venture Agreement   This Joint Venture Agreement (hereinafter called ‘‘Agreement’’) is made on this [●] at [●]. BY AND BETWEEN ABC [●], a Company incorporated under the laws of [●]and having its corporate office at [●] (hereinafter referred to as “First Party” or “Foreign Company”), which expression shall, unless the text otherwise expresses, shall include all its administrator, representative, liquidators and permitted assigns); AND MNO India Private Limited, a Company incorporated under the Companies Act, 2013 with CIN [●], and having its registered office at [●] (hereinafter referred to as “Second Party” or “Indian Company”), which expression shall, unless the text otherwise expresses, shall include all its administrator, representative, liquidators and permitted assigns); (ABC and MNO India Private Limited are hereinafter referred individually as a “Party” and collectively as the “Parties”). WHEREAS: the ABC is engaged in the business of manufacturing of two wheelers and has necessary experience and expertise in that field;    the MNO India Private Limited has a wide distribution network in the Indian market and have necessary experience and expertise in that field; the foreign Company want to expand their business operation in India as well and it approach Indian Company to join hands for extending their distribution network to sell the manufactured products of foreign Company. Both the Companies decided to carry out the said business activities by incorporating or setting up a new company upon the following terms and conditions: NOW THIS AGREEMENT OF JOINT VENTURE IS WITNESSETH AS UNDER: DEFINITIONS In this agreement, the following expressions shall have the following meanings: (a) “Act” means the (Indian) Companies Act, 2013; (b) “Affiliate” means: In relation to an individual, anybody corporate under his control (as defined herein) individually or in association with his relative, any trust of which he is either a settler or a beneficiary, any partnership firm under his control individually or in association with his Relatives, or his Relatives; and In relation to a person other than an individual, any Person which (i) Controls, (ii) is controlled by or (iii) is under the common Control with such person; (c) “Agreements “means this joint venture agreement and all its schedules and annexures, as may be amended from time to time; (d) “Applicable laws” means any laws, rules, regulation, ordinance, orders, directives, codes, judgement, decrees, injunctions or any interpretation, determinations, awards, permits, licenses, authorizations, directives, ruling or decisions of, agreement with, or by any government authority, applicable from time to time; (e) “Business” means [●] (f) “Deed of adherence” means a deed to be executed by any third party undertaking to adhere to the terms and conditions of this Agreement in the form attached in Annexure [●] (g) “Encumbrance” means and includes any third-party rights, interest, mortgages, security interests, liens, encumbrances or charges of any nature whatsoever, including any right of first offer or refusal, non-disposal undertaking, previous sale, gift, claims, demands, orders, judgement or any notification, securities and guarantees; (h) “Face” Value” means, with respect to, Issue of shares- a mutually agreed terms and price, provided the price is determined in accordance with applicable laws (including the applicable Indian foreign exchange control law). In the absence of an agreement on the price, it shall be determined in accordance to procedure established in Clause (ii) (B). Transfer of shares-for exit of a shareholder from the JVC and acquisition of the subject shares by another existing Shareholder (s) or by third party, a price determined as under: A mutually agreed and negotiated price in compliance with applicable laws (including   the applicable Indian foreign exchange control laws). In the absence of an agreement on the price in accordance with (A) above within a period of 30days, then each party shall appoint its own valuer and get the valuation and the average price of the two prices (if different) shall be fair value price. (i) “Person (s)” shall include an individual or association or body of individuals whether incorporated or not, company, firm, partnership, joint venture, limited liability partnership, trust, association, syndicate, or corporation, or an agency or instrumentality thereof and/or any other legal entity; (j) “Product” means [●]  (k) “Share Capital” means the total issued and paid-up equity share capital of the JVC; (l) “Share” means equity share of the JVC; INTERPRETATIONS In this agreement, except to the extent that the context otherwise requires: Words importing the masculine gender shall also include the feminine gender and vice versa and the use of the singular shall include the plural and vice versa. Words denoting a specific gender shall include all genders; References to an individual shall include his legal representative, successor, legal heir, executor and administrator;  Reference to any legislation or law or to any provision thereof shall include references to any such law as it may, after the date hereof, from time to time, be amended, supplemented or re-enacted, and any reference to statutory provision shall include any subordinate legislation rules and regulation framed there under made from time to time under that provision; Any term or expression used but not defined herein shall have the same meaning attributable to it under the applicable law; Any reference to any Clause shall be deemed to be a clause of this Agreement;  The use of the word ‘including’ followed by a specific example in this Agreement shall not be construed as limiting the meaning of the general wording preceding it;  Headings and bold typeface are used for convenience only and shall not affect the interpretation of this Agreements;  References to the Recitals, Clauses and Appendices shall be deemed to be a reference to the recitals, clauses and appendices of this Agreement; The descriptive headings and bold typeface are inserted solely for convenience of reference and are not intended as complete or accurate descriptions of the content thereof and shall not be used to interpret the provisions of this Agreement; and  The terms “herein”, “hereof”, “hereto”, “hereunder” and words of similar purport refer to this Agreement as a whole. Heading are for convenience only and shall not..

Double Tax Avoidance Agreement

What is Double Tax Avoidance Agreement?

What is Double Tax Avoidance Agreement? Double Taxation Avoidance Agreements or DTAA is a treaty signed between India and another country, through which a taxpayer can avoid the double tax on their income in the country in which it is earned as well as its taxability in the home country. Such treaties promotes the exchange of goods, services, and investment of capital between the two countries. At present, India has double tax avoidance treaties with more than 80 countries around the world. Background of DTAA The primary idea behind DTAA agreements with various countries is to minimize the opportunity for tax evasion for tax payers in either or both of the countries between which the bilateral/multilateral DTAA agreement have been signed. Lower withholding tax is a plus for taxpayers as they can pay lower TDS on their interest, royalty or dividend incomes in India, while some agreements provide for tax credits in the source or country of operations so that taxpayers don’t pay the same tax twice. In some cases, such as agreements with Mauritius, Cyprus, Singapore, Egypt etc. capital gains tax is exempted which can be a boon to taxpayers as they can use the DTAA agreement to minimize taxes. Benefits of DTAA Entering into the DTAA offer various benefits to the business organization which include among other thing the following benefits: Prevent Paying Double Tax on the same income; Lower Withholding Tax (Tax Deduction at Source or TDS); Exemption from taxes; Tax credits. In some cases, the DTAA also provide concessional rates of tax. DTAA can become an incentive for even legitimate investors to route investments through low-tax regimes to sidestep taxation. This leads to a loss of tax revenue for the country. DTAA also provides tax certainty to the various investors and businesses of both the countries through the clear allocation of taxing rights between the contracting states by Agreement. Methods of Claiming DTAA benefits? There are basically 3 methods through which the benefits of the DTAA can be claimed: – Tax Deduction: under the tax deduction method the Taxpayer can claim the deduction of the taxes paid to foreign government in the tax paid in the country of residence. Tax Exemption: Under this method, tax payer can claim the relief in Tax paid in any one of the two countries. Tax credit: under this method, Tax relief can be claimed by way of credit on the tax paid outside India in the country of residence.   Documentation and work to claim DTAA advantage There are certain procedure that are to be followed in order to avail the double tax avoidance agreement. An individual, in order to get qualified for availing the advantage of the DTAA’s provisions and benefits is required to submit the tax residence certificate to the deductor and the following paperwork:- These documents are listed below: Indemnity/Self-Declaration Form Tax Residency Certificate (In order to apply for a Tax Residency Certificate under sections 90A and 90 of the Income Tax Act, you must submit Form 10FA. The certificate will be issued under Form 10FB following the application’s successful verification and processing.) PAN Card Copy Self-Attested Visa Passport Xerox PIO Proof Copy  Procedure of Applying the DTAA There are certain steps to be followed in order to apply the DTAA provisions:- Tax Liability as per Income Tax Act: Find out the type of income on which DTAA applies and its tax liability under the Income Tax Act. Tax liability under the DTAA: If the income falls under specific articles of DTAA, then the income will be taxed as per those articles. Finalize the tax liability: Using section 90(2), decide which is more advantageous between the IT Act and DTAA (Treaty Override). How to Avoid Double Taxation The Double Tax Avoidance Agreement (DTAA) helps you avoid paying taxes in both your home country and the country you reside. The tax treaty is signed by India and another country to avoid double taxation. Some DTAAs are comprehensive agreements comprising all income types, while others are specific agreements focusing on a few income types. Many people are under the impression that by using a DTAA, they can avoid paying taxes altogether. However, that is not true. The Data allows for a rebate, not a total deduction, which means when NRIs earn income in India, they can reduce their tax implications. HDFC Bank provides an online DTAA Annexure you can use to avail of tax rate deductions. A brief summary of the DTAA / Tax Treaty A tax treaty is an bilateral agreement made by two countries through which the countries strive to resolve issues involving double taxation of the income of the same person in the country in which it is earned and the country of which such person is resident When an individual or business invests in a foreign country, the issue of which country should tax the investor’s earnings may arise. Both countries may voluntarily enter into a tax treaty to agree on which country should tax the investment income to prevent the same income from getting taxed twice. There are certain countries which are considered as tax heaven such as Mauritius and these countries do not enter into any kind of tax treaty. Ritu

What is joint venture agreement

Basics of Vendor Agreement For Small Businesses

What is Vendor Agreement and why you need them? or Agreement and why you need them? All businesses, no matter how big or small, have connections to other organizations and without any sort of external vendor Agreement , no business could survive. The relationships for small home enterprises may be minor. However, other businesses have several links with external parties, and this is where things can become challenging and we need to execute a vendor agreement so a document defining statement of works (SOW) is used to define things. Vendor agreement is vital legal agreements that specify the requirements of a commercial relationship between a small company and its suppliers or vendors. A vendor contract is a legally enforceable agreement between a company (the buyer or customer) and a vendor (the seller or supplier), also known as a supplier contract or procurement contract. Types of Vendor Agreement Depending on the distinctive requirements of the company and the nature of the goods or services being purchased, several vendor contracts may be employed. Here are a few typical forms of vendor agreements: Fixed Price Contract: Regardless of any market fluctuations or delays, the buyer and seller agree on a fixed price for a precisely defined good or service. Cash Reimbursable Contract: The parties agree that in addition to the normal charge, the seller shall additionally be paid for any work performed in connection with the performance of the Agreement. Time and Materials Contract: The hourly rate and timeframe are agreed upon by the buyer and vendor. Usually applied to outside contractors like consultants, freelancers, and third-party providers. Letter Subcontract: Due to unclear contract provisions or complicated projects with many variables, a portion of the work—typically under 40%—is subcontracted. Indefinite Delivery Contract: The parties agree to a flexible agreement with an arbitrary number of goods or an arbitrary period of service, depending on the needs of the buyer. It works well in circumstances where several projects are active at once. Distribution Agreement Contract: Specifies the conditions for distributing a vendor’s goods, such as when, where, and how they will be distributed. It also specifies if the relationship is exclusive or not. Checklist for vendor contract   Overview of the Agreement: The Agreement should contain a clear declaration of the parties’ intentions that describes the nature, extent, and time span of the relationship. Additionally, it must list the parties involved, namely the vendor and the small business. Product or Service: In the beginning, the vendor contract needs to include a thorough description of the goods or services the vendor is going to supply the company. Pricing and Payment Terms: The payment information is yet another vital part of any agreement. The amount of the good or service being supplied, the timing of payments, the recipients of payments, and any provisions specifying penalties for late payments should always be laid out in a standard vendor contract. Intellectual Property: It is advisable to include a provision describing the usage and ownership of intellectual property if it will be used by either party Confidentiality and Non-Disclosure: It contains clauses to safeguard any private information sent between the parties throughout the course of the business partnership. Termination and dispute resolution: Indicate the terms and conditions, including any notice requirements, under which any party can terminate the agreement as well as the dispute resolution procedure, such as arbitration, mediation, or litigation. Conclusion​ When you start or expand your company, vendor contracts might not be at the top of your list of concerns, but they guarantee uninterrupted operations. Understanding the key aspects of vendor contracts makes sure you set up the right foundation for your company’s operations. If You are looking for Vendor Agreement format Vendor contract Format; or Vendor Contract You can contact us for getting a tailored Vendor contract for you!​ Ritu

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