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What is a joint venture and how is it counted towards minority business enterprise (“MBE”) participation goals in Baltimore City?

Under the Baltimore City Code, a joint venture is an association between at least two (2) business enterprises that provides for the sharing of economic interest. Generally, the joint venture is entered into for mutual benefit with the understanding that each business enterprise in the joint venture is to share in its profits and losses.

Should a business certified as an MBE seek to enter into a joint venture, the business owner should keep in mind that a bidder for a contract in Baltimore City may count towards the contract goal the portion of its expenditure to a joint venture that is equal to the percentage of the MBE’s participation in the joint venture. The MBE member of the joint venture must have an interest in the control, management, risks and operation of the joint venture that is commensurate with the member’s percentage of ownership. In addition, the MBE member must be responsible for a clearly defined portion of the work to be performed with its own forces equal to its share in the ownership, control and management of the joint venture.

Certification of a business can be a viable tool for developing and maintaining business relationships. Businesses seeking certification as an MBE in Baltimore City may want to consider obtaining legal advice concerning eligibility requirements for certification prior to applying for certification.