Document background
The Joint Venture Loan Agreement is a specialized legal instrument used when parties wish to establish a joint venture that requires external or partner financing. This document is particularly relevant in the Indian market where joint ventures are common for large-scale projects or when combining complementary capabilities. The agreement serves dual purposes: it outlines the joint venture's structure, governance, and operational parameters while simultaneously documenting the loan terms, security arrangements, and repayment obligations. The document must comply with Indian legal requirements, including those under the Companies Act, 2013, Banking Regulation Act, 1949, and Foreign Exchange Management Act (if foreign partners are involved). It's commonly used in capital-intensive projects, market expansion initiatives, or when partners want to share both investment burden and business risks. The agreement typically includes comprehensive provisions for business operations, funding mechanisms, security arrangements, and default scenarios.
