Written By: James R. Benjamin, Jr., Esquire
A joint venture under the ACDBE Program refers to an association of an ACDBE business firm and one or more other firms to carry out a single, for-profit business enterprise, for which the parties combine their property, capital, skills and knowledge.
In structuring the joint venture, it is important to clearly identify the participants in the joint venture as well as the single, for-profit business enterprise to be undertaken. The term of the joint venture should be clearly stated as well as any factors that could affect the term of the joint venture. Capital to be contributed by joint venture participants should be included as well as methods for distributing profits and losses. It is important to clearly delineate responsibilities for the overall and day-to-day management of the joint venture as well as responsibilities for administrative matters, including recordkeeping and account management. In addition, events and conditions upon which the joint venture may be dissolved, and the method by which assets are to be distributed upon dissolution, should be clearly stated.
Certification of a business can be a viable tool for developing and maintaining business relationships. Businesses seeking certification as an MBE, DBE or ACDBE may want to consider obtaining legal advice concerning eligibility requirements for certification prior to applying for certification.