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Venture Capital Partnership Agreement for India

Venture Capital Partnership Agreement Template for India

A comprehensive legal agreement governed by Indian law that establishes and regulates a venture capital partnership structure. The document outlines the relationship between general partners (fund managers) and limited partners (investors), detailing capital contributions, investment strategies, profit distribution mechanisms, and management responsibilities. It ensures compliance with Indian Partnership Act, SEBI regulations, and relevant securities laws while providing a framework for venture capital investments in portfolio companies. The agreement incorporates specific provisions for investor protection, regulatory compliance, and dispute resolution under Indian jurisdiction.

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What is a Venture Capital Partnership Agreement?

The Venture Capital Partnership Agreement serves as the foundational document for establishing and operating a venture capital fund in India. It is essential when creating a new venture capital fund or restructuring an existing one, providing the legal framework for pooling and investing capital in promising businesses. The agreement must comply with Indian regulatory requirements, including the Indian Partnership Act, 1932, SEBI (Alternative Investment Funds) Regulations, 2012, and other applicable laws. It details crucial aspects such as capital commitments, investment strategies, management fees, profit sharing, and exit mechanisms. This document is particularly important in India's growing venture capital ecosystem, where it helps structure investments while protecting both investor and manager interests through clear governance frameworks and compliance mechanisms.

What sections should be included in a Venture Capital Partnership Agreement?

1. Parties: Identification of all partners, including general partners and limited partners

2. Background: Context of the partnership formation and its intended purpose

3. Definitions: Comprehensive list of defined terms used throughout the agreement

4. Partnership Structure: Legal form of partnership, term, and registration details

5. Capital Contributions: Initial and subsequent capital commitments, drawdown procedures

6. Investment Strategy: Fund's investment focus, restrictions, and investment criteria

7. Management and Administration: Powers and duties of general partner, management fee structure

8. Partnership Committee: Formation, composition, and powers of investment/advisory committees

9. Profit and Loss Allocation: Distribution waterfall, carried interest, and loss sharing mechanisms

10. Transfer of Interests: Rules regarding transfer of partnership interests and admission of new partners

11. Reporting and Accounting: Financial reporting obligations, accounting standards, and audit requirements

12. Term and Termination: Duration of partnership, extension provisions, and termination events

13. Confidentiality: Protection of partnership and portfolio company information

14. Governing Law and Dispute Resolution: Applicable law and mechanism for resolving disputes

What sections are optional to include in a Venture Capital Partnership Agreement?

1. FCPA Compliance: Required when partnership involves US investors or investments

2. Co-Investment Rights: Include when partners have rights to co-invest in portfolio companies

3. Key Person Provisions: Include when success depends on specific individuals' involvement

4. ESG Policy: Include when partnership has environmental, social, and governance focus

5. FEMA Compliance: Required when foreign investors are involved

6. Special Purpose Vehicle Provisions: Include when investments will be made through SPVs

7. Follow-on Investment Rights: Include when providing for future funding rounds

8. Strategic Investor Rights: Include when strategic investors have special privileges

What schedules should be included in a Venture Capital Partnership Agreement?

1. Schedule 1 - Partner Information: Details of all partners including contact information and capital commitments

2. Schedule 2 - Investment Guidelines: Detailed investment criteria, sector focus, and investment restrictions

3. Schedule 3 - Management Fee Structure: Detailed calculation and payment terms for management fees

4. Schedule 4 - Distribution Waterfall: Detailed mechanics of profit distribution and carried interest calculations

5. Schedule 5 - Valuation Policy: Methodology for valuing portfolio investments

6. Schedule 6 - SEBI Compliance Checklist: Regulatory compliance requirements and procedures

7. Appendix A - Subscription Agreement: Standard form for partner subscription to the fund

8. Appendix B - Partner Capital Account: Template for maintaining partner capital accounts

9. Appendix C - Advisory Committee Charter: Rules governing the advisory committee operations

10. Appendix D - Reporting Ƶ: Standard formats for periodic reports to partners

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions































































Clauses













































Relevant Industries

Financial Services

Venture Capital

Private Equity

Technology

Healthcare

E-commerce

Manufacturing

Clean Energy

Agriculture Technology

Financial Technology

Education Technology

Consumer Services

Infrastructure

Real Estate

Relevant Teams

Legal

Compliance

Investment

Finance

Risk Management

Fund Administration

Corporate Governance

Portfolio Management

Investor Relations

Due Diligence

Relevant Roles

Fund Manager

Managing Partner

Investment Director

Chief Investment Officer

Legal Counsel

Compliance Officer

Chief Financial Officer

Investment Associate

Portfolio Manager

Risk Manager

Fund Administrator

Managing Director

General Counsel

Partnership Secretary

Investment Committee Member

Advisory Board Member

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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