Sba Mentor Protege Agreement Template
I have also noticed a few provisions in the joint venture agreement template that may confuse the joint venture partners: Whatever your starting point – even an SBA model – there is absolutely no substitute for carefully crossing your joint venture agreement with the corresponding and current SBA regulations. It`s the only 100% sure way to know you`re complying with the regulations – and avoid adopting terms that may seem mandatory but are far from nothing. The amendments to Form 2459 include questions about other mentoring-protected agreements and information that may lead to a determination of affiliation between the mentor and the protégé. f. Mentor and Protégé ( ) do not have an agreement in principle to merge or sell shares to each other. If you`ve been following my posts on SmallGovCon (and I hope you did!), you`ll recall that I recently wrote about the significant changes the SBA made to the regulation of joint ventures in November 2020. For Mentor-Protégé joint ventures that are trying to comply with regulations under section 13 C.F.R. 125.8, I believe two of these changes – to the mandatory joint venture requirements for bank accounts or bank accounts. Record keeping – are significant changes that are contrary to the “old” regulations before November, so a joint venture agreement is not compliant unless it includes these updates.
At the time of this article, these changes are not included in the SBA template. Be sure to check out the new template if you`re working on a mentor-protected agreement. Be sure to carefully consider these new questions about the ASMPP model before submitting your application. These questions seem to suggest that the ASMPP will take a closer look at the relationship between the proposed mentor and the protégé before approving a game. The questions essentially reflect the assumptions of affiliation set out in 13 C.F.R. 121.103, although some are specific to a mentor-protected relationship. For example, whether a protégé “purchased assets from Mentor, including but not limited to facilities or equipment,” has no analogy in the SBA`s membership rules – it seems specific to the ASMPP. Aside from potential issues arising from the November 2020 rules, the SBA`s joint venture submission does not specify when a particular item is required by the regulation and when it is not.
And the bill is full of provisions that probably seem to be required by law, but are not. Here are a few that caught my attention: l. The protégé ( ) does not have a franchise or license agreement with the mentor. I think it`s great that the SBA has given the public a starting point for a joint venture agreement. But I fear that the now outdated model may put small businesses to sleep in a false sense of security. With little fanfare, the SBA updated the model agreements under the Protected Mentorship Program for All Small Mentors (PSGA). The new template adds a series of checkbox-like questions, mainly about the possible affiliation between the mentor and the protégé. e. Mentor or any of the owners of Mentor ( ) does not own ( ) the equity of the protected and does not have the right to own shares of the protected, including stock options or convertible bonds.
m. The mentor and protégé ( ) did not create a joint venture that received multiple orders more than two years apart or received more than three orders. If you answer yes to any of these questions, the ASMPP office will likely ask for more information, so it probably makes sense to anticipate this by submitting a statement as part of the initial application. i. An owner or general manager of the protégé is not ( ) a family member of an owner or manager of the mentor. (Family members are limited to married couples, parties to a registered partnership, parents, children, and siblings.) k. In the previous three fiscal years, the protégé ( ) did not receive 70% or more of his income from the mentor. The SBA described the changes to the form in this way in a communication from the Federal Register: h. An officer, director, managing member, partner, principal shareholder or employee of the protégé ( ) does not hold any position with the mentor and ( ) has not previously held any position with the mentor as an officer, director, managing member, partner, principal shareholder or employee of the protégé.
g. Protégé ( ) has not acquired any assets from Mentor, including but not limited to facilities or equipment. n. Mentor a ( ) does not have a good character and a favorable financial situation. The November 2020 regulations also made other changes, not only to the Joint Ventures Regulations for Small Businesses with Less than 13 C.F.R. 125.8, but separate joint venture rules for the programs for paragraph 8(a), SDVOSB/VOSB, HUBZone and EDWOSB/WOSB. For example, the new SBA regulations remove the term “project manager” in favor of the more inclusive “responsible manager”. These other changes may not be significant enough to make a joint venture non-compliant if it doesn`t implement them – but why take risks? j. An owner or manager of the protégé and the owner or manager of the mentor company ( ) do not have several investments in common. .