The SBA has corrected a flaw in the profit-splitting provisions of its new joint venture regulations.
Under the corrected regulations, which became effective on December 27, all of the SBA’s joint venture regulations – those for small businesses, SDVOSBs, HUBZones, 8(a)s, and WOSBs – will require that each joint venturer receive profits commensurate with the work it performs. The SBA’s revisions clear up an inconsistency between the 8(a) joint venture regulations and the regulations for the SBA’s other set-aside programs, and eliminates a potential disincentive for joint venturers to avail themselves of the protections of a formal legal entity such as a limited liability company.
Effective August 2016, the SBA overhauled its joint venture regulations. Among the major changes, the SBA eliminated so-called “populated” joint ventures and made numerous additions and revisions to the regulations governing mentor-protege joint ventures, SDVOSB joint ventures, and joint ventures for other set-aside contracts.
Keep reading this article at: http://smallgovcon.com/statutes-and-regulations/sba-corrects-profit-splitting-flaw-in-new-joint-venture-regulations/