{"id":504,"date":"2024-07-16T19:38:02","date_gmt":"2024-07-16T19:38:02","guid":{"rendered":"https:\/\/www.bondingspecialist.com\/blog\/?p=504"},"modified":"2024-07-16T19:40:09","modified_gmt":"2024-07-16T19:40:09","slug":"key-points-on-complying-with-state-law-when-forming-a-joint-venture","status":"publish","type":"post","link":"https:\/\/www.bondingspecialist.com\/blog\/key-points-on-complying-with-state-law-when-forming-a-joint-venture\/","title":{"rendered":"Key Points on Complying with State Law When Forming a Joint Venture"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Understanding State Law Requirements for Joint Ventures<\/h2>\n\n\n\n<p>As highlighted by <a href=\"https:\/\/www.pilieromazza.com\/\">PilieroMazza<\/a>, small business joint ventures (JVs) aiming for set-aside work must adhere not only to Small Business Administration (SBA) JV regulations but also to relevant state laws. A recent <a href=\"https:\/\/www.nasbp.org\/blogs\/kathryn-doran1\/2023\/04\/24\/forming-a-joint-venture-sba-stresses-importance-of\">ruling<\/a> by the SBA&#8217;s Office of Hearing and Appeals (OHA) underlines the critical importance of this dual compliance. In the case of SysCom, Inc., SBA No. SIZ-6195 (March 7, 2023), OHA reversed a decision that had found SNI United, LLC\u2014a JV between an 8(a) participant and a small business\u2014eligible for an 8(a) contract award. The reversal was due to SNI&#8217;s failure to comply with Michigan state laws and its bylaws, which allowed its non-8(a) member to exert undue control over the JV.<\/p>\n\n\n\n<p>Specifically, Michigan law requires a designated manager in a JV&#8217;s operating agreement or articles of organization, which SNI lacked. Furthermore, SNI\u2019s bylaws necessitated both JV members to be present at board meetings to achieve a quorum, thus enabling the non-8(a) member to block actions by simply not attending. This setup contradicted SBA regulations, which mandate that an 8(a) participant manage the JV.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Managing Board Structure to Comply with SBA and State Regulations<\/strong><\/h2>\n\n\n\n<p>The takeaway: for a JV to qualify as a small business under SBA set-aside contracts, it must not only fulfill SBA JV regulations but also ensure strict adherence to the state laws where it is organized. This requires careful documentation of the JV&#8217;s management structure in its organizational documents. Failure to comply with state laws can render a JV ineligible for contract awards, despite meeting all SBA requirements. <em>(Original blog referenced from: www.nasbp.org)<\/em><\/p>\n\n\n\n<p><strong>We specialize exclusively in surety bonds and bring decades of experience to each case. Contact us to learn more about our commitment to your bonding needs.<\/strong><\/p>\n\n\n\n<p>At <a href=\"https:\/\/www.bondingspecialist.com\/\">Construction Bonding Specialists<\/a>, we work with new and experienced contractors to find the most satisfactory bond solutions. As a dedicated surety-bond-only agency with decades of bonding experience, we strive to discover surety solutions for all types of cases, ranging from routine to challenging. <a href=\"https:\/\/www.bondingspecialist.com\/contact\">Contact us<\/a> online or call us at <a href=\"tel:%20248-349-6227\">248-349-6227<\/a> to learn more.<\/p>\n\n\n\n<p><em>Written by the digital marketing team at Creative Programs &amp; Systems:<\/em><a><em> <\/em><\/a><a href=\"http:\/\/www.cpsmi.com\"><em>www.cpsmi.com<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Understanding State Law Requirements for Joint Ventures As highlighted by PilieroMazza, small business joint ventures (JVs) aiming for set-aside work must adhere not only to Small Business Administration (SBA) JV regulations but also to relevant state laws. A recent ruling by the SBA&#8217;s Office of Hearing and Appeals (OHA) underlines the critical importance of this&#8230;<\/p>\n","protected":false},"author":1,"featured_media":505,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-504","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Key Points on Complying with State Law When Forming a Joint Venture - Blog | Construction Bonding Specialists<\/title>\n<meta name=\"description\" content=\"Discover why adherence to state laws is crucial for small business joint ventures (JVs) pursuing SBA set-aside contracts. 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