Women Business Enterprise (“WBE”) and Minority Business Enterprise (“MBE”) Certifications

Introduction

In order to gain access to new customers, increase business from existing customers or meet specific diversity-based criteria required by certain government agencies, a woman-owned business or minority-owned business may benefit from pursuing and applying for a Women Business Enterprise (“WBE”) or Minority Business Enterprise (“MBE”) Certifications, respectively.

Generally, to be eligible for these types of certifications, the business must be at least 51% owned and controlled by women or minorities who are United States citizens and must have the individual manage day-to-day operations and also make long-term decisions. Oftentimes, “controlled’ means that the person in question must be the President or CEO of the company, must be active in the daily management, and must have held that position for at least six months.

There are many layers to the certification process, all dependent on the governmental unit targeted.

Types of Certifications

Depending on the type of certification and the type of customers that a particular W/MBE is gearing its business towards, there are several different options in seeking a certification. There are M/WBE certifications at the federal, state, county, and municipal levels. Some governmental certifications may even offer reciprocity in certifications with other government agencies. However, the most common certification is through private third-party certifiers, including the Women’s Business Enterprise National Council (“WBENC”) and the National Minority Supplier Development Council (“NMSDC”). These private third-party certifiers offer a relatively faster and more marketable certification based mostly on brand recognition.

Process

Generally, there is an online application that requires extensive disclosure and uploading of corporate governance documents, information and identification papers of the owners and officers, disclosures of the business of the company, including its material agreements with customers and vendors, detailed financial statements, bank statements, and descriptions of the capital structure, among other things. Along with the application, there is usually a filing fee and the certification company often performs a site visit with the company to confirm all of the information in the application is true and correct.

Conclusion

For businesses that are women-owned or minority-owned, a WBE or MBE certification is definitely a good way to increase exposure and potential for new business. Certifications with companies like the WBENC or NMSDC not only cover marketing with private companies but will also allow the certified business to satisfy many of the local certifications they may be exposed to. By becoming certified with the WBENC or NMSDC, the client covers the possibility of exposure to federal contracts, national private contracts, and the local certifications that the company could be grandfathered into.

If you would like to discuss any of these topics further, please contact attorney Frank Portera at (847) 705-7555 or at fportera@lavellelaw.com. During our one-hour free initial consultation, we can work one-on-one with the client to identify more particularized areas of their business where they can benefit from setting themselves apart from the whole with a W/MBE certification.