Joint Venture Agreement for Setting Up an Internet Portal (India) by OLL
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JOINT VENTURE FOR SETTING UP AN INTERNET PORTAL (INITIAL MOU FOR PARTICIPATION)
MEMORANDUM OF UNDERSTANDING
ABC
ND
XYZ.
Re: ____________________________Pvt.Ltd.
THIS MEMORANDUM OF UNDERSTANDING made this ___ day of _____________between ABC having his office at__________________, India hereinafter referred to as "ABC" (which expression and the expression "ABC Group" shall unless it be repugnant to the context or meaning thereof mean and include himself and the present other shareholders of __________________Pvt.Ltd. and their respective heirs, executors, administrators and assigns) of the One Part and MR. XYZ having his office at_____________________. hereinafter referred to as "XYZ" (which expression and the expression "XYZ Group" shall unless it be repugnant to the context or meaning thereof be deemed to mean and include himself and his nominees to the extent specified herein and their respective heirs, executors, administrators and assigns) of the Second Part;
WHEREAS ABC is one of the founding shareholders and is Chairman and Director of a company incorporated in India known as ______________ Pvt.Ltd. hereinafter referred to as "the Company" which is in the process of setting up an internet portal, relating to ___________________, known as "__________________";
AND WHEREAS ABC and certain other persons have advanced sums of money to the Company in respect of which shares have been/are to be issued to them and this group is for the sake of brevity referred to as the "XYZ Group";
AND WHEREAS XYZ has agreed that he and his nominees (for the sake of brevity referred to as the "ABC Group") will invest an amount of Rs.__________________ /- (Rupees _______________Only) to acquire 20 % ( twenty per cent) of the Capital of the Company on certain terms and conditions and equity shares of the Company will be issued to the members of XYZ Group accordingly;
AND WHEREAS the parties hereto are desirous of recording the terms and conditions of their agreement in writing
NOW THIS MEMORANDUM OF UNDERSTANDING WITNESSETH AS UNDER:-
1. ABC Group has caused to be incorporated a Company known as ________ Pvt. Ltd. hereinafter referred to as "the Company" and has, since several months been working on establishing an internet portal relating to___________________.
2. The paid up capital of the Company shall be Rs._________________ /- (Rupees_________) comprising _____________(____________) equity shares of Rs._____ /- (Rupees_________) each.
3. It has been agreed that XYZ group shall hold 60% (sixty per cent) of the paid-up capital of the Company and that XYZ Group shall hold 20% (twenty per cent) of the paid-up capital of the Company.
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This Memorandum of Understanding (MOU) outlines the initial terms for a joint venture to develop and launch an internet portal. It covers equity distribution, investment schedules, board representation, and restrictions on share transfers until a public offering occurs.
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About this template
What is this template?
This document is a preliminary memorandum of understanding for a corporate joint venture in India. It contains specific provisions for foreign inward remittance, a phased rupee-denominated investment schedule, and a detailed 60/20/20 equity split including employee stock options. It is not a final Shareholders Agreement or a simple sale of shares agreement.
When should you use it?
Use this document when parties have agreed on the financial terms and board representation for a new tech venture but are not yet ready to sign a definitive Shareholders Agreement. If the investment is purely financial without board rights or specific project collaboration, use a Share Subscription Agreement.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 3 | Capital Structure | Allocates 60% of the paid-up capital to the ABC Group and 20% to the XYZ Group. |
| 4 | Stock Options | Reserves 20% of equity for stock options, including specific 1% allotments to Mr. XYZ and Mr. PQR. |
| 5 | Investment Schedule | Outlines a phased payment schedule in Indian Rupees for the XYZ Group to acquire its 20% stake. |
| 6 | Restriction on Dilution | Prohibits the Company from diluting equity or ABC Group from selling shares without XYZ Group's consent before an IPO. |
| 7 | Board Representation | Grants XYZ the right to be appointed as a Director of the Company upon request. |
| 9 | Definitive Agreement | Obliges both parties to execute a detailed Shareholders Agreement to replace this broad Memorandum of Understanding. |
Who it's for
- an Indian founder seeking an investor for an internet portal startup
- an individual investor acquiring a 20% stake in a private Indian company
- parties intending to bridge a funding gap before a formal Shareholders Agreement
How long it runs and how it's signed
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