This document discusses pitfalls of joint ventures. It begins by defining a teaming arrangement as a partnership or joint venture between companies to act as a potential prime contractor, or an agreement for one company to act as a subcontractor for another prime contractor. Some benefits of teaming include the ability to compete for larger contracts and meet subcontracting requirements. However, the document warns that an "ostensible subcontractor" relationship, where a subcontractor performs primary work, can result in the companies being considered as affiliates for size standards. The document emphasizes that terms and conditions for any joint venture or teaming agreement must be put in writing to avoid conflicts down the road. It also discusses SBA's definition and rules
Government contractors use different teaming arrangements to best position themselves for a future award. Frequently a key element should be a clear appreciation of the relationship between the teaming arrangement and the desired business outcome. The best approach is to put “a planning team” in place (lawyers and CPAs) before putting “your business team” in place for a proposal. Join us as we help you understand:
•JV’s versus teaming agreement – which is preferable—and when?
•Small business set aside concerns
•Pitfalls – poorly written or nonspecific agreements
•To consolidate or not to consolidate – a look at the financial statement impact
With good planning, you can position yourself to respond to RFP’s effectively, create a positive business relationship, and know what to expect at year-end.
Exponential expansion in the use of Requests for Proposals (RFPs) has placed a powerful tool in the hands of general counsel — one that they use with uneven skill. Here are the pitfalls to avoid and the keys to making RFPs clear, fair and effective.
Government contractors use different teaming arrangements to best position themselves for a future award. Frequently a key element should be a clear appreciation of the relationship between the teaming arrangement and the desired business outcome. The best approach is to put “a planning team” in place (lawyers and CPAs) before putting “your business team” in place for a proposal. Join us as we help you understand:
•JV’s versus teaming agreement – which is preferable—and when?
•Small business set aside concerns
•Pitfalls – poorly written or nonspecific agreements
•To consolidate or not to consolidate – a look at the financial statement impact
With good planning, you can position yourself to respond to RFP’s effectively, create a positive business relationship, and know what to expect at year-end.
Exponential expansion in the use of Requests for Proposals (RFPs) has placed a powerful tool in the hands of general counsel — one that they use with uneven skill. Here are the pitfalls to avoid and the keys to making RFPs clear, fair and effective.
Shareholder Activism in the United States: Managing Shareholder InterventionsStephen Bainbridge
This is a presentation I gave at the University of Auckland Faculty of Law on May 19, 2014. It is based on my paper Preserving Director Primacy by Managing Shareholder Interventions (August 27, 2013), which is available at SSRN: http://ssrn.com/abstract=2298415.
Even though the primacy of the board of director primacy is deeply embedded in state corporate law, shareholder activism nevertheless has become an increasingly important feature of corporate governance in the United States. The financial crisis of 2008 and the ascendancy of the Democratic Party in Washington created an environment in which activists were able to considerably advance their agenda via the political process. At the same time, changes in managerial compensation, shareholder concentration, and board composition, outlook, and ideology, have also empowered activist shareholders.
There are strong normative arguments for disempowering shareholders and, accordingly, for rolling back the gains shareholder activists have made. Whether that will prove possible in the long run or not, however, in the near term attention must be paid to the problem of managing shareholder interventions.
This problem arises because not all shareholder interventions are created equally. Some are legitimately designed to improve corporate efficiency and performance, especially by holding poorly performing boards of directors and top management teams to account. But others are motivated by an activist’s belief that he or she has better ideas about how to run the company than the incumbents, which may be true sometimes but often seems dubious. Worse yet, some interventions are intended to advance an activist’s agenda that is not shared by other investors.
This paper proposes managing shareholder interventions through changes to the federal proxy rules designed to make it more difficult for activists to effect operational changes, while encouraging shareholder efforts to hold directors and managers accountable.
Learn the best way to start managing commercial contracts. Go from contract files and spreadsheets to an effective, efficient, and profitable contract management system.
Topics covered include:
- What is a contract?
- Why contract management matters
- Turn text to data
- Deal with documents
- Contract portfolio management
- Contract management systems
Clear, practical recommendations to get you started.
Navigating contracts can be treacherous. This presentation highlights the "need to knows" when reading and writing any contract. Specification from the start can help prevent headaches, extra expenses and lawsuits later on whether you´re subscribing to a cloud-based service or doing business with a friend. NDAs, Terms of Use and software licensing are also discussed.
Ever wonder what the pros and cons to stock options are? Well, wonder no more- that information is here for you! In addition, this presentation provides valuable information for both emploees and employers and fast facts about non-statutory or non'qualified stock options which may be issued to employes as well as non-employees such as contractors and freelancers. Andrew Cooper, CPA (Quinn Lobel & Associates, P.C.) co-hosts.
Remembering the old days - 32 years back - My Article on 'Goodwill: Tax Treatment' which was published in 1984 in Taxmann.
Editorial Comments: Taxation of goodwill in cases involving its transfer has often presented innumerable problems culminating in the Supreme Court decision in the case of B.C. Srinivasa Setty holding that goodwill generated in a newly commenced business is not subject to capital gains tax. The author of this article first explains the meaning and nature of goodwill and thereafter discusses the debatable question as to whether goodwill can be regarded as a capital asset. He also goes into the question as to whether and when goodwill can be regarded as having a cost of acquisition. A typical case discussed by the author is of payment for goodwill in instalments acquired by a chartered accountant in which case the question arose whether the payments so made were deductible as business-expenditure. Thus, in this article, nearly all controversial aspects of tax treatment of goodwill have been dwelt on with reference to the relevant case law on the subject - Editor
On September 28, 2016, Christine Williams of Outlook Law, LLC, and John Klein, Associate General Counsel for the SBA, presented the new regulations and regulatory changes to the SBA’s Mentor Protégé Program.
Shareholder Activism in the United States: Managing Shareholder InterventionsStephen Bainbridge
This is a presentation I gave at the University of Auckland Faculty of Law on May 19, 2014. It is based on my paper Preserving Director Primacy by Managing Shareholder Interventions (August 27, 2013), which is available at SSRN: http://ssrn.com/abstract=2298415.
Even though the primacy of the board of director primacy is deeply embedded in state corporate law, shareholder activism nevertheless has become an increasingly important feature of corporate governance in the United States. The financial crisis of 2008 and the ascendancy of the Democratic Party in Washington created an environment in which activists were able to considerably advance their agenda via the political process. At the same time, changes in managerial compensation, shareholder concentration, and board composition, outlook, and ideology, have also empowered activist shareholders.
There are strong normative arguments for disempowering shareholders and, accordingly, for rolling back the gains shareholder activists have made. Whether that will prove possible in the long run or not, however, in the near term attention must be paid to the problem of managing shareholder interventions.
This problem arises because not all shareholder interventions are created equally. Some are legitimately designed to improve corporate efficiency and performance, especially by holding poorly performing boards of directors and top management teams to account. But others are motivated by an activist’s belief that he or she has better ideas about how to run the company than the incumbents, which may be true sometimes but often seems dubious. Worse yet, some interventions are intended to advance an activist’s agenda that is not shared by other investors.
This paper proposes managing shareholder interventions through changes to the federal proxy rules designed to make it more difficult for activists to effect operational changes, while encouraging shareholder efforts to hold directors and managers accountable.
Learn the best way to start managing commercial contracts. Go from contract files and spreadsheets to an effective, efficient, and profitable contract management system.
Topics covered include:
- What is a contract?
- Why contract management matters
- Turn text to data
- Deal with documents
- Contract portfolio management
- Contract management systems
Clear, practical recommendations to get you started.
Navigating contracts can be treacherous. This presentation highlights the "need to knows" when reading and writing any contract. Specification from the start can help prevent headaches, extra expenses and lawsuits later on whether you´re subscribing to a cloud-based service or doing business with a friend. NDAs, Terms of Use and software licensing are also discussed.
Ever wonder what the pros and cons to stock options are? Well, wonder no more- that information is here for you! In addition, this presentation provides valuable information for both emploees and employers and fast facts about non-statutory or non'qualified stock options which may be issued to employes as well as non-employees such as contractors and freelancers. Andrew Cooper, CPA (Quinn Lobel & Associates, P.C.) co-hosts.
Remembering the old days - 32 years back - My Article on 'Goodwill: Tax Treatment' which was published in 1984 in Taxmann.
Editorial Comments: Taxation of goodwill in cases involving its transfer has often presented innumerable problems culminating in the Supreme Court decision in the case of B.C. Srinivasa Setty holding that goodwill generated in a newly commenced business is not subject to capital gains tax. The author of this article first explains the meaning and nature of goodwill and thereafter discusses the debatable question as to whether goodwill can be regarded as a capital asset. He also goes into the question as to whether and when goodwill can be regarded as having a cost of acquisition. A typical case discussed by the author is of payment for goodwill in instalments acquired by a chartered accountant in which case the question arose whether the payments so made were deductible as business-expenditure. Thus, in this article, nearly all controversial aspects of tax treatment of goodwill have been dwelt on with reference to the relevant case law on the subject - Editor
On September 28, 2016, Christine Williams of Outlook Law, LLC, and John Klein, Associate General Counsel for the SBA, presented the new regulations and regulatory changes to the SBA’s Mentor Protégé Program.
This short presentation from Georgia business law firm HunterMaclean provides overview information on four important aspects of your business's legal "fitness": Business Structure, Employment, Agreements and Contracts, and Business Succession. The presentation contains links to articles with more information on each topic.
How to Position Your Startup for VC Fundingideatoipo
During this webinar, you will learn the basics of the venture model and path along with the necessary steps to take so that your company’s legal structure is an attractive investment. The discussion will cover:
1. Why a Delaware C-Corp is the most-common structure
2. How to document the relationship of the founders and early employees
3. The typical funding stages of a successful startup
4. An overview of convertible debt and SAFEs
5. Why it’s critical to run pro forma cap tables before financings
6. What happens in a venture financing
7. Why compliance with securities laws is important
8. Common legal mistakes in raising capital
9. And much, much more
Come with your questions and get ready to be excited about venture funding!
How to Raise Seed Funding for Your Startup: Convertible Notes and SAFEsideatoipo
Seed financings enable a startup to put together its initial team, build a working prototype, and begin to test the market. Often these investments are made via convertible debt or SAFEs. Veteran Silicon Valley startup and corporate attorney Jason Putnam Gordon will cover the following topics:
1. Required corporate structure
2. Legal considerations when pitching investors for seed financing
3. Differences between using convertible debt and SAFEs
4. Key terms and considerations when raising seed funding
5. Common mistakes and pitfalls that companies make when raising seed funding via convertible debt and SAFEs
6. How to close your seed financing
7. Important post-closing tasks
8. And much, much more
Insider Lease Agreements (Series: Fairness Issues in Real Estate-Based Bankru...Financial Poise
It is a common play in real estate to create a separate operating entity to serve as a tenant and execute a lease between the owner of the property and himself. Typically, this happens in assets which serve as a real estate-based business, such as a retail property. The structured enables the operator to reduce the taxable income of the business and also provide a liability shield for the property owner.
This arrangement can lead to some ethical issues, should the property owner become distressed. For example, is the lease amount above market and therefore being used to inflate the property valuation? Is rent actually being paid? Is there a proper lease in place or just an internal handshake? Attorneys need to understand the set-up in order to know what is in bounds and what is outside the lines.
To view the accompanying webinar, go to:https://www.financialpoise.com/financial-poise-webinars/insider-lease-agreements-2021/
11.24.20 how to Raise Seed Funding for Your Startup: Convertible Notes and ...ideatoipo
Seed financings enable a startup to put together its initial team, build a working prototype, and begin to test the market. Often these investments are made via convertible debt or SAFEs. Veteran Silicon Valley startup and corporate attorney Jason Putnam Gordon will cover the following topics:
1. Required corporate structure
2. Legal considerations when pitching investors for seed financing
3. Differences between using convertible debt and SAFEs
4. Key terms and considerations when raising seed funding
5. Common mistakes and pitfalls that companies make when raising seed funding via convertible debt and SAFEs
6. How to close your seed financing
7. Important post-closing tasks
8. And much, much more
Come with your questions and get ready to be excited about seed financings!
.
About the Speaker
Jason Putnam Gordon is a results-oriented corporate attorney practicing in the Venture Capital and Emerging Growth Companies group in Polsinelli’s San Francisco office. Jason has a passion for working with experienced entrepreneurs and executives to make their vision a reality.
In his practice, he regularly represents companies throughout their life cycle in matters related to venture capital financing, strategic corporate relationships, corporate formation, complex mergers and acquisitions, sales, and divestitures. With industry focuses on consumer goods and technology, because of his broad skill set and deep network, Jason regularly works in wide array of verticals including artificial intelligence, virtual reality, augmented reality, video games, software, hardware, life sciences, the internet of things and agricultural technology.
Jason works with companies based locally, elsewhere in the U.S. and internationally. Jason brings a unique skill set to the negotiating table and to litigation-minimization strategies in the board room. He started his career as a federal law clerk in the United States District Court for the Eastern District of Pennsylvania and then continued as a litigator handling corporate, securities, intellectual property, and commercial litigation before establishing a transactional practice.
Outside of the office, Jason is dedicated to his family and has a passion for skydiving and indoor body flight.
If you have any questions regarding the content of this presentation, you can reach Jason at:
JGordon@polsinelli.com
Non-competition and Non-solicitation ProvisionsKevin Learned
In this seminar we analyzed non-competition and non-solicitation provisions in the contexts of M&A transactions, employee/consultant relationships and subcontracting agreements. We addressed issues that arise in the drafting and negotiation of these provisions, as well as issues related to enforcement and litigation, with a particular emphasis on issues impacting federal service contractors who operate in the DC/MD/VA region.
What New and Small Businesses Need to Know: Contracts and Agreementslerchearly
This was the fourth in a series of online events co-presented by Lerch, Early & Brewer and the Innovation Station Business Incubator Powered by the Prince George's County Economic Development Corporation.
Increasingly, law firms have used the device of merger as a road to quick growth. Without comprehensive planning the merger route is a hazardous undertaking.
1. Pitfalls
of Joint Ventures
Presented by:
David A. Rose
Principal Attorney
Rose Consulting Law Firm
We Build Our Relationships
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2. What is a Teaming Arrangement?
“Contractor team arrangement,” as used in this
subpart, means an arrangement in which—
– Two or more companies form a partnership or joint
venture to act as a potential prime contractor
– A potential prime contractor agrees with one or
more other companies to have them act as its
subcontractors under a specified Government
contract or acquisition program.
FAR 9.601 We Build Our Relationships
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Rose Consulting Law Firm - specializing in
Government & Small Business Law
3. Teaming is not an SBA Creature
• SBA regulations do not address teams where
they address joint ventures
– Joint ventures, a corollary of teaming will be
addressed next hour
• Where SBA addresses joint ventures, they
discuss exceptions and application of affiliation
• SBA case law; however, discusses several
concepts and the application of a very specific
type of affiliation referred to as an ostensible
subcontractor which we will discuss this
hour. We Build Our Relationships
One Client at a Time
Rose Consulting Law Firm - specializing in
Government & Small Business Law
4. What are the Benefits?
• General benefit for all concerns both large and
small:
- The team is able to compete for larger more
technically complex contracts by combining the
capabilities and past performance of various team
members.
- The large prime firm meets subcontracting
requirements
- The small prime fills in missing needs
We Build Our Relationships
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5. Advantage of Teaming, cont.
• Agencies may consider an offeror’s subcontractor’s
capabilities and experience under relevant
evaluation factors, where the RFP does not prohibit
the consideration of a subcontractor’s experience in
the evaluation of proposals (Roca Management
Education & Training, Inc., January 15, 2004, GAO, B-
293067).
• The prime contractor is solely responsible for
meeting all contract requirements, including the
Limitations on Subcontracting percentage
• Must watch out for Ostensible Subcontractor
relationship with its subcontractor(s) We Build Our Relationships
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6. Ostensible Subcontractor
• An ostensible subcontractor is a subcontractor that performs
primary and vital requirements, or a subcontractor upon
which the prime contractor is unusually reliant.
• A contractor and its ostensible subcontractor are treated as
joint venturers, and therefore affiliates, for size determination
purposes.
• 13 CFR 121.103(h)(4)
We Build Our Relationships
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Rose Consulting Law Firm - specializing in
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7. Ostensible Case Study
• Recent Case on Affiliation and Ostensible
Subcontractors –
http://www.roseconsultingllc.org/Summary_of_Mor
ris-Griffin_v.pdf
– Morris‐Griffin v. C&L Service Corporation, 2010 WL
3221975 (E.D. Va)
– Large HUD loan processing company teamed with janitorial
8(a) company to win 8(a) set-aside contact to process
loans for HUD – found to have fraudulently circumvented
the SBA rules by using a nominal 8(a) contractor.
We Build Our Relationships
One Client at a Time
Rose Consulting Law Firm - specializing in
Government & Small Business Law
8. Terms - Pitfall
• Get your Terms and Conditions Down in Writing
before you Team or Joint Venture
• Teaming and JV’ing begins as a honeymoon
• If you do not and Something goes bad, it will go
really bad
• Problems will be avoided if you address them before
you start
• Do you remember folks that roomed with their best
friend in college?
We Build Our Relationships
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Rose Consulting Law Firm - specializing in
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9. Why is this so important?
• It goes back to J Sutter’s Mill
– Or perhaps the Chubaccah defense for South Park
fans
• Two best friends go to Sacramento in 1848 to mine
for gold
• Best friends since 6 years old
• One finds gold first while panning
• Out comes Bowie knife
• Money changes everything!!!
We Build Our Relationships
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10. Joint Ventures
• A joint venture is an association of individuals and/or
concerns with interests in any degree or proportion by way of
contract, express or implied, consorting to engage in and carry
out no more than three specific or limited-purpose business
ventures for joint profit over a two year period, for which
purpose they combine their efforts, property, money, skill, or
knowledge, but not on a continuing or permanent basis for
conducting business generally.
• This means that the joint venture entity cannot have more
than 3 contracts over a two year period, starting from the
date of the submission of the first offer (3-in-2 rule). New Rule
March 2011 – Not so new now, but still misused
• 13 CFR 121.103(h)
We Build Our Relationships
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Rose Consulting Law Firm - specializing in
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11. That was SBA’s Definition
• The real definition of a joint venture is a little more generic
and these are done all the time in the commercial industry:
• A joint venture is an association of individuals and/or
concerns with interests in any degree or proportion by way of
contract, express or implied, consorting to engage in and carry
out specific or limited-purpose business ventures for joint
profit, for which purpose they combine their efforts, property,
money, skill, or knowledge.
• Quite often in Federal contracting, as well as in the
commercial sector, you will see large conglomerates join
forces to JV and pursue large contracts.
• Lockheed Martin and Boeing
• CH2M Hill and Clark Nexsen
We Build Our Relationships
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12. But for Our Purposes…
• Let’s stick with SBA’s version, as it is these
Rules we are playing by and
• SBA makes the rules
• Given SBA makes the rules:
• What do we have to do to qualify to do one of
these joint ventures?
• Well first, to participate ourselves, we must be
small. As many of you know this is the first
pitfall – Small in SBA terms is like to ask
• What shape is a cloud? Let’s discuss… We Build Our Relationships
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13. So we will form a joint Venture then
• Joint Ventures
– Formal joint venture (Separate legal entity, such as
LLC)
– Informal (no new entity formed)
• Which is Best?
– An informal joint venture provides no protections
between the parent companies, but we can give
different percentages of profit that ownership.
– A formal joint venture (Inc or LLC) at least shields
the parent from liability from the subs.
We Build Our Relationships
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14. Why is this so important?
Joint Venture exceptions to Affiliation
• A joint venture is a small business concern when the
combined revenue/employees of all joint venture
partners do not exceed the small business size standard.
General rule – all joint ventures are affiliated! Pitfall.
• Exception, a joint venture is considered small when each
joint venture partner is small, and:
• The procurement is bundled; or
• For a procurement having a receipts based size standard, the
dollar value of the procurement exceeds ½ the size standard; or
• For a procurements having an employee based size standard, the
dollar value of the procurement exceeds $10 million.
• CHART available at roseconsultingllc.org
13 CFR 121.103(h)(3) We Build Our Relationships
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15. Major Pitfalls for Joint Ventures
• Do not violate the “3-in-2 rule” – three contracts
won in two year period, by the same joint
venture entity.
• If you violate the rule, general affiliation will be
found.
• 13 CFR 124.513(a) requires formal approval by
SBA of all joint ventures pursuing 8(a) contracts.
• Performance of work requirements apply to
cooperative efforts of the joint venture entity.
We Build Our Relationships
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16. 8(a) Joint Ventures
• For competitive 8(a) procurements that meet 13 CFR
124.513(b)(1)(ii):
– 8(a) firm can joint venture with one or more other
businesses and the joint venture is considered
small, so long as each is small under the size
standard for the procurement, and;
– The first pitfall here is in knowing the rules – first
rule about the rules is that they change and many
are exercised with discretion – Let’s discuss what
that means….
We Build Our Relationships
One Client at a Time
Rose Consulting Law Firm - specializing in
Government & Small Business Law
17. Mentor Protégé 8(a) JV
• For joint venture between 8(a) protégé and SBA
approved mentor:
• The joint venture is considered small, so long as the 8(a)
protégé is small for the procurement.
• 13 CFR 124.513(b)(3)
• The joint venture may bid as a small business on any federal
prime procurement.
13 CFR 121.103(h)(3)(iii)
PITFALL – HUBZONES!!!
13 CFR § 126.616(a) – HUBZones can only JV
w/ HUBZones We Build Our Relationships
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18. 8(a) Joint Ventures
• For any 8(a) joint venture between 8(a) business and another
firm to perform an 8(a) contract (new 40% rule):
• If the JV is populated the 8(a) firm must perform 40% of the
work of the JV and none of the work may be subcontracted
out to JV members
• If unpopulated (other than admin personnel), the 8(a)
prime must perform 40% of the work performed by the
total amount of work subcontracted to members of the JV.
13 CFR 124.513(d)
We Build Our Relationships
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Rose Consulting Law Firm - specializing in
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19. What have we learned about JVs?
• All Joint Ventures are affiliated – Be aware of
exceptions
• The affiliated joint venture may qualify for an
exception under SBA – Be careful who drafts JV
agreement - Pitfall
• A small business can never joint venture with a large
business, unless it is an approved SBA 8(a) mentor
protégé relationship – Pitfall – Only SBA approved
M/P
• SBA makes up the rules we play by here
– Pitfall – Can be exercised w/ discretion We Build Our Relationships
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Rose Consulting Law Firm - specializing in
Government & Small Business Law
20. The Rules
• Here are the rules
• Size regulations -- 13 CFR Part 121
• 8(a) & SDB regulations -- 13 CFR Part 124
• Government Contracting Programs – 13 CFR Part 125.6
• HUBZone Program – 13 CFR Part 126
• Service Disabled Veteran Program – 13 CFR 125
• Women-Owned Small Business Program-13 CFR 127
• Questions about Joint Ventures?
We Build Our Relationships
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Rose Consulting Law Firm - specializing in
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21. Questions?
David A. Rose drose@roseconsultingllc.org
Principal Attorney (678) 854-0222
Rose Consulting Law Firm http://www.roseconsultingllc.org
We Build Our Relationships
One Client at a Time
Rose Consulting Law Firm - specializing in
Government & Small Business Law