Gaps in mentored joint ventures?

      In addition to problems cited in the SBA inspector general’s new report on the All Small Mentor-Protege program, a separate concern has been raised by an attorney about a “gap in the law” regarding joint ventures created by the mentors and proteges.

      Stephen Ramaley, counsel with Miles & Stockbridge PC, wrote in a blog that while SBA regulations require a joint venture to designate the protege as a “managing venturer,” the term is not well defined. “The regulations do not define ‘managing venturer’ or state how much control such a ‘manager’ must maintain over the joint venture,” Ramaley wrote.

      Ramaley tracked several SBA Office of Hearing & Appeals decisions on “managing venturers,” finding them to be incomplete, especially with regard to veto rights by the minority party in the joint venture.

      “Therefore, it is vital that SBA clarifies whether the term ‘managing venturer’ means control only over a joint venture’s contract performance—its ‘ventures’—or control also over the joint venture’s corporate governance and all decision making—or something in between,” Ramaley wrote.

      SBA officials were not immediately available.

More information:
Stephen Ramaley column: https://bit.ly/2lXvGdV

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