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Volume XII, Number 275

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How to Qualify as a Women-Owned Small Business

Last year, we wrote about the opportunities available to businesses owned by service-disabled veterans. There are also programs available to provide similar advantages to women-owned businesses. One such program is the Women-Owned Small Business Federal Contracting Program, which was established in February 2011 through the U.S. Small Business Administration (SBA). This program was designed to provide women-owned small businesses (WOSB) and economically disadvantaged WOSBs (EDWOSB) with assistance in competing for business with the federal government. Under this program, federal contracts in industries where WOSBs are underrepresented are set aside specifically for WOSBs to compete for; similarly, federal contracts are set aside in industries where EDWOSBs are underrepresented specifically for EDWOSBs.

How Can I Qualify?

To be certified as a WOSB and compete for the federal government contracts set aside for WOSBs, the business must satisfy the following requirements:

  • The business must be at least 51% unconditionally and directly owned by women who are U.S. citizens.
  • The management and day-to-day operations of the business must be managed by women.
  • The individuals making long-term decisions for the business must be women.
  • The highest officer position in the business (such as the President or CEO) must be a woman, and this woman must work on a full-time basis during normal business hours. In addition, the woman holding the highest officer position may not have outside employment that takes away from her ability to manage the business on a full-time basis.
  • The business must be considered a "small business". The requirements for being considered a "small business" will vary depending on the type of industry in which the business operates and the contract the business is competing on.

To be certified as an EDWOSB, the business must meet all of the requirements to qualify as a WOSB, but in addition, the woman that owns and controls the business and holds the highest officer position must be considered "economically disadvantaged" under the SBA regulations. Whether or not a woman is considered economically disadvantaged will be determined on a case-by-case basis, but if any of the following factors are true, she will automatically be disqualified:

  • The woman's personal net worth (excluding her ownership interest in the business and her primary residence) is $750,000 or more.
  • The woman's adjusted gross yearly income averaged over the 3 years prior to certification is $350,000 or more.
  • The fair market value of all of the woman's assets is $6,000,000 or more.

If you think your business could qualify as a WOSB or EDWOSB, you must go through the certification process either through self-certification or through one of the four SBA-approved third-party certifiers:

  • El Paso Hispanic Chamber of Commerce
  • National Women Business Owners Corporation
  • US Women’s Chamber of Commerce
  • Women’s Business Enterprise National Council (WBENC)

For more detail regarding the certification process, visit What You Need To Know if You Are a Women Owned Small Business on the SBA's website, which has additional information not only about the certification process, but also about the program in general.

Also be sure to keep in mind that the Women-Owned Small Business Federal Contracting Program is just one of a number of programs established under state and federal law to help women-owned businesses compete in industries in which they have been historically underrepresented. 

© 2022 Varnum LLPNational Law Review, Volume VII, Number 30
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About this Author

Kristen M. Veresh, finance attorney, Varnum
Associate

Kristen is an associate in the finance and corporate practice groups, and focuses her practice on both financial matters, and business and corporate matters. She represents lenders and borrowers in a variety of financial transactions including real property, acquisition and commercial financing transactions. In addition, she advises startup to mid-size companies in general business, corporate governance and private equity matters.

248-567-7827
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