Tips for Getting Certified as a Women Owned Business

by ExpertEntrepreneur

Becoming certified as a Women Business Enterprise comes with many businesses.

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 it.

  • 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 is was started or acquired.
  • Resumes for all owners, key members of management, and 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

There are 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.

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 Women's Business Enterprise (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.

Updated: 05/27/2016, ExpertEntrepreneur
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