Joint Venture Agreement In Japanese

- December 11, 2020

Many joint ventures fail because of the many risks and complexity of integrating operations and the work culture of two different companies. Here are some of the questions that may arise when entering into a joint venture in Japan: there is no country provision in Japan and normal exit rules are often used, as in other countries, such as sale or call options or termination rights (i.e. the dissolution of the joint venture) in the event of a substantial breach of joint enterprise agreements by the other partner. , bankruptcy of the other partner or if financial difficulties arise for the joint venture. Why do U.S. companies find joint ventures with Japanese companies so attractive? Emerging sector companies often view a joint venture with a Japanese company as a profitable way to enter a potentially lucrative market; Senior managers of mature industries see the joint venture as a cost-effective way to maintain market share. In sectors that range from consumer electronics to machine tools, the Japanese have the advanced products that American consumers want. Joint ventures allow U.S. companies to purchase a product at a lower price than domestic production costs. The Japanese partner continues to lower its production-learning curve by producing products for the U.S. markets.

Thanks to these joint ventures and coalitions, the efficiency gap between production processes in the United States and Japan will widen further. In addition, a joint venture partner generally prefers to use or develop new IP-based IP addresses invented in its own industry. However, it depends on the role of the different parties and varies from case to case. In any event, it is desirable that ownership of the newly created investigation period in a joint venture be clearly described in advance in the joint enterprise agreement; Partners should not simply rely on the interpretation of the law. Since the legal protection of a minority shareholder is not sufficient for a joint venture agreement, the joint venture agreement generally provides reserve and information rights for a minority shareholder. There is no specific sector where joint ventures are most used. In many cases, a foreign company wishing to join the Japanese market opts for a joint venture agreement with a Japanese partner, either to use (i) the existing public license or the authorization of a Japanese partner; or (ii) a Japanese partner`s existing customer base or distribution channel using its own specific expertise and international know-how or brand. As far as (i) is concerned, the aerospace, medical or financial industries are good examples. As far as (ii) is concerned, there is no specific activity. There are different organizational structure options for a limited company; as a general rule, there will be a board of directors whose shares cannot be freely transferred (i.e., the board`s agreement is necessary for the transfer of shares, the “limited shares”).

In this chapter, we will discuss this type of limited company as a joint venture vehicle, unless expressly stated otherwise. Do the partners of the joint venture have informed accounting or reporting problems regarding their participation in the joint venture? A successful joint venture can help UK and Japanese companies access new opportunities and is an effective strategy to grow faster and make a profit. The advantages of a successful joint venture are that minority investors do not have special protection for joint ventures. The general protection provided by japan`s Corporate Law applies to partners of minority joint ventures, unless these protection measures are limited or excluded by the joint enterprise agreement. Read this report “International Joint Ventures, a Practical Approach” (PDF) for further insight into the structuring of international companies (non-specific in Japan).

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