Becoming certified as a a women owned business—a Women Business Enterprise (WBE)—can bring a variety of benefits. Many public corporations and government agencies allocate a percentage of their business to women-owned businesses, potentially opening doors for your business and helping you achieve greater success.
Unfortunately, getting that certification isn’t easy. The requirements are very strict, and you’ll need a great deal of documentation. While time-consuming, it is worth it.
Here’s what you should know about getting certified.
Meeting the Requirements
Before you apply for certification, make sure your business meets the basic requirements. These requirements may seem straightforward, but it can get complicated when it comes to proving that you meet them.
- At least one woman has at least 51% control and ownership of the business
- The woman owner serves as CEO or President, if these positions exist
- The woman is active in the daily management of the business
- The woman is a U.S. citizen
- The woman has had the officer position and ownership for a minimum of 6 months
Documents You Need
The list of documentation you need for certification is fairly exhaustive. Among other things, you will need to provide:
- A written history of your business including how, where, why, and by whom it was started or acquired
- Resumes for all owners, key members of management, and members of the board of directors
- Evidence of gender for female owners
- Financial statements for the business
- Three years’ of tax returns
- Active liabilities or debts of the business
- Proof of equity or capital investment by female owners
- Employee payroll for the month before the application is submitted
- 1099 or W2s for every director, officer, and owner receiving compensation
- Management and consulting agreements
- Service agreements
- Subsidiary agreements
Special Requirements for Corporations, Partnerships, and LLCs
Before you apply, make sure you’re aware of the special requirements when it comes to each type of business entity. For example, if you form an LLC, you will need to provide your Articles of Organization, LLC Regulations, member list with gender and titles, Certificate of Formation, Schedule of Advances to members for the last three years, and proof of authority to do business in the state in which you are headquartered if you are an out-of-state LLC.
The requirements differ for corporations and partnerships, but note that the 51% ownership requirement applies regardless of entity type.
Where Can You Get Certified?
Most women-owned businesses choose to get certified through a third-party WBE provider. The most popular is the National Women’s Business Owner Corporation (NWBOC), which was the first certifier in the country. The NWBOC has a certification kit on sale that includes a guide to the application process and a way to organize your application material. Another option is the Women’s Business Enterprise National Council (WBENC), a non-profit based in Washington, D.C. that helps women get certified.
Some states offer programs for businesses to become WBE certified. You can check with your state’s Office of Equal Opportunity or Department of Economic Development. Going through a city or state agency may be the best route if you plan to do business within the state and do not need national certification.
While getting certified can seem like an uphill battle, it will be worth it in the end. Be prepared to establish proof that a woman is actually a majority owner with majority control of the company as this is where most people run into trouble. For example, if Rebecca owns 100% of Company A but the company’s operating agreement has a transfer of ownership provision that means Rebecca must give fellow owner John a right of first refusal if she sells her interest, Rebecca’s ownership rights in the company are provisional and the company would not qualify for certification.
About the Author
Hector Mesa writes for USA Corporate Services Inc.
Thanks for the info. I didn’t know that you can be certified as a woman-owned business. This allows us to participate in a community of individuals who are similar to us. Thanks for the guide.
Such an extensive guide. It is nice that you have put all the needed requirements right from the beginning.