If you’re setting up your first joint venture under the SBA’s rules, you may be tempted to download the SBA’s template joint venture agreement and use it as-is.
But, as of the date of this post, the SBA’s template joint venture agreement is outdated–and it also has some other quirks and potential problems you should know about. If you’re planning to use the SBA’s joint venture template, read this first.
Outdated Provisions
If you’ve been following my posts on SmallGovCon (and I hope you have!), you’ll recall that I have recently written about substantive changes the SBA made to the joint venture regulations in November 2020. For mentor-protégé joint ventures attempting to comply with the regulations under 13 C.F.R. 125.8, I believe that two of these changes–to the mandatory JV requirements governing bank accounts and recordkeeping, respectively–are substantive changes sufficiently at odds with the “old,” pre-November regulations such that a joint venture agreement will be non-compliant unless it includes these updates. As of the date of this post, these changes are not included in the SBA’s template.
The November 2020 regulations also made some other changes, not only to the small business joint venture regulations under 13 C.F.R. 125.8, but the separate joint venture regulations for the for 8(a), SDVOSB/VOSB, HUBZone, and EDWOSB/WOSB programs. For instance, the SBA’s new regulations eliminate the term “Project Manager” in favor of the more-inclusive “Responsible Manager.” These other changes may not be significant enough to render a joint venture non-compliant if it doesn’t enact them–but why take any risks?
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