Economically Disadvantaged Women Owned Small Business Certification Requirements.

To take advantage of the newly created program, an Economically Disadvantaged Women Owned Small Business (EDWOSB) must meet the following requirements:

  • If the  EDWOSB is certified by a certifying entity approved by SBA, the certifying entity has not issued a decision currently in effect finding that the concern does not qualify as a EDWOSB, and there have been no changes in its circumstances affecting its eligibility since its certification.
  • A firm is eligible to participate in the program if the  EDWOSB is certified by the U.S. Small Business Administration as an 8(a) BD Program Participant and the 51% owner is an economically disadvantaged woman (or women).
  • If the EDWOSB is a corporation, the stock ledger and stock certificates must evidence that at least 51% of each class of voting stock outstanding and 51% of the aggregate of all stock outstanding is unconditionally and directly owned by one or more women who are economically disadvantaged. In determining unconditional ownership of the concern, any unexercised stock options or similar agreements held by an economically disadvantaged woman will be disregarded. However, any unexercised stock option or other agreement, including the right to convert non-voting stock or debentures into voting stock, held by any other individual or entity will be treated as having been exercised.
  • If the EDWOSB is a partnership, the partnership agreement must evidence that at least 51% of each class of partnership interest is unconditionally and directly owned by one or more economically disadvantaged women.
  • If the EDWOSB is a limited liability company, the articles of organization and any amendments, and operating agreement and amendments, must evidence that at least 51% of each class of member interest is unconditionally and directly owned by one or more economically disadvantaged women.
  • The birth certificates, naturalization papers, or passports must show that the business concern is at least 51% owned and controlled by economically disadvantaged women who are U.S. citizens.
  • The ownership by economically disadvantaged women must not be subject to any conditions, executory agreements, voting trusts, or other arrangements that cause or potentially cause ownership benefits to go to another.
  •  The 51% ownership by economically disadvantaged women is not through another business entity (including employee stock ownership plan) that is, in turn, owned and controlled by one or more economically disadvantaged women.
  • If the 51% ownership by economically disadvantaged women is held through a trust, the trust must be revocable, and the economically disadvantaged woman who is the grantor, must be a trustee, and the sole current beneficiary of the trust.
  • The management and daily business operations of the concern must be controlled by one or more economically disadvantaged women. Control means that both the long-term decision making and the day-to-day management and administration of the business operations are conducted by one or more economically disadvantaged women.
  • An economically disadvantaged woman must holds the highest officer position in the firm and her resume must evidences that she has the managerial experience of the extent and complexity needed to run the firm.
  • If the economically disadvantaged woman manager does not have the technical expertise or possess the required license for the business she must have ultimate managerial and supervisory control over those who possess the required licenses or technical expertise.
  • The economically disadvantaged woman who holds the highest officer position of the firm manages it on a full-time basis and devotes full-time to the firm during the normal working hours of firms in the same or similar line of business.
  •  The economically disadvantaged woman who holds the highest officer position must not engage in outside employment that prevents her from devoting sufficient time and attention to the daily affairs of the firm to control its management and daily business operations.
  • If the EDWOSB is a corporation, the articles of incorporation and any amendments, articles of conversion, by-laws and amendments, shareholder meeting minutes showing director elections, shareholder meeting minutes showing officer elections, organizational meeting minutes, all issued stock certificates, stock ledger, buy-sell agreements, stock transfer agreements, voting agreements, and documents relating to stock options, including the right to convert non-voting stock or debentures into voting stock evidence that one or more economically disadvantaged women control the Board of Directors of the concern. Economically disadvantaged women are considered to control the Board of Directors when either: (1) One or more economically disadvantaged women own at least 51% of all voting stock of the concern, are on the Board of Directors and have the percentage of voting stock necessary to overcome any super majority voting requirements; or (2) economically disadvantaged women comprise the majority of voting directors through actual numbers or, where permitted by state law, through weighted voting.
  • If the EDWOSB is a partnership, the partnership agreement evidences that one or more economically disadvantaged women serve as general partners, with control over all partnership decisions.
  • If the EDWOSB is a limited liability company, the articles of organization and any amendments, and operating agreement and amendments evidence that one or more economically disadvantaged women serve as management members, with control over all decisions of the limited liability company.
  • No males or other entity cam exercise actual control or have the power to control the concern.
  • The economically disadvantaged woman upon whom eligibility is based can demonstrate that her personal net worth is less than $750,000, excluding her ownership interest in the concern and her equity interest in her primary personal residence.
  • The personal financial condition of the woman claiming economic disadvantage, including her personal income for the past three years (including bonuses, and the value of company stock given in lieu of cash), her personal net worth and the fair market value of all of her assets, whether encumbered or not, evidences that she is economically disadvantaged.
  • The adjusted gross income of the woman claiming economic disadvantage averaged over the three years preceding the certification does not exceed $350,000.
  • The adjusted gross income of the woman claiming economic disadvantage averaged over the three years preceding the certification exceeds $350,000; however, the woman can show that this income level was unusual and not likely to occur in the future, that losses commensurate with and directly related to the earnings were suffered, or that the income is not indicative of lack of economic disadvantage.
  • The fair market value of all the assets (including her primary residence and the value of the business concern but excluding funds invested in an Individual Retirement Account or other official retirement account that are unavailable until retirement age without a significant penalty) of the woman claiming economic disadvantage does not exceed $6 million.
  • The woman claiming economic disadvantage has not transferred any assets within two years of the date of the certification.
  • The woman claiming economic disadvantage has transferred assets within two years of the date of the certification. However, the transferred assets were: (1) To or on behalf of an immediate family member for that individual’s education, medical expenses, or some other form of essential support; or (2) to an immediate family member in recognition of a special occasion, such as a birthday, graduation, anniversary, or retirement.
  • The SBA, in connection with an examination or protest, has not issued a decision currently in effect finding that this business concern does not qualify as a EDWOSB.
  • All required documents verifying eligibility for the EDWOSB requirement have been submitted to the WOSB Program Repository, including any supplemental documents if there have been changes since the last representation, or will be submitted to the contracting officer if the repository is unavailable and then posted to the WOSB Program Repository within thirty (30) days of the repository becoming available.

At Kleiner & Cazeau we are prepared to assist eligible firms in obtaining EDWOSB certification, appealing certification denials, defending eligible firms in bid protests or initiating bid protests against firms not eligible to participate in the program. If you are interested in obtaining EDWOSB certification or have questions or concerns about the program please call us at (305) 517-1392 ext 102.