Community Link ABQ
Joint Venture Policy

Purpose/Overview/Intent

This Joint Venture Policy requires that Community Link ABQ (CLABQ) evaluate its participation in joint venture arrangements under federal tax law and take steps to safeguard CLABQ’s tax exempt status with respect to such arrangements.  It applies to any joint ownership or contractual arrangement through which there is an agreement to jointly undertake a specific business enterprise, investment, or exempt-purpose activity as further defined in this policy.

Policy:

Joint Ventures or Similar Arrangements.  For the purpose of this policy, a joint venture or similar arrangement means any joint ownership or contractual arrangement through which there is an agreement to jointly undertake a specific enterprise, investment, or exempt-purpose activity without regard to: (1) whether CLABQ controls the venture or arrangement; (2) the legal structure of the venture or arrangement; or (3) whether the venture or arrangement is taxed as some other business structure for federal income tax purposes.  This policy applies to all ventures or arrangements.

Safeguards to Ensure exempt Status Protection.  CLABQ will: (1) negotiate in its transactions and arrangements with other members of the venture or arrangement such terms and safeguards adequate to ensure that CLABQ’s exempt status is protected; and (2) take steps to safeguard CLABQ’s exempt status with respect to the venture or arrangement.  Some examples of safeguards include:

  1. control over the venture or arrangement sufficient to ensure that it furthers the exempt purpose of the organization;
  2. requirements that the venture or arrangement gives priority to exempt purposes over maximizing profits for the other participants;
  3. that the venture or arrangement not engage in activities that would jeopardize CLABQ’s exemption; and
  4. that all contracts entered into with other organizations be on terms that are at arm’s length or more favorable to CLABQ.

1/12/2017     Version 1