Women’s Business Enterprise (WBE) certification is a powerful tool that has helped thousands of women entrepreneurs compete for contracts with the government and major corporations.
It’s important because, unfortunately, women-owned companies are still significantly underrepersented when it comes to those contracts, at negligible rates of 4 to 5 percent of male-owned businesses. Being WBE-certified helps level the playing field.
The Women’s Business Development Center (WBDC) is a regional partner for the Women’s Business Enterprise National Council (WBENC), the country’s largest third-party certifier of women-owned businesses.
We verify that companies really are women-owned and that WBE status only goes to the companies that actually deserve it.
Let’s talk about how your woman-owned company may qualify for WBE certification and avoid being denied or decertified.
What are the requirements?
WBENC certification requires that a company be 51 percent or more owned by a woman or women. Additionally, the female owner must also be able to manage and operate the business without control by or substantial dependence upon a male. She must have the knowledge and experience needed to run the business. She must be able to make critical decisions, such as the sale of assets, without veto authority from anyone else.
She must be in control of the company’s strategic decisions, as well as day-to-day operations. Certainly, she can delegate and rely upon employees to do their jobs, yet she must be able to control and manage them. In short, she must be the ultimate decision-maker.
To ensure that the companies that receive the WBE certification are, in fact, woman-owned, -controlled, -operated and -managed, the application process is thorough. Applicants provide business and financial documents as part of their application. These documents are reviewed by WBDC staff, and a site visit is made to every new applicant (as well as to renewing applicants on a less frequent basis).
Then a committee of trained corporate and WBE volunteers makes a recommendation whether to approve or deny the application for certification. WBE certification is valid for one year.
What May Trigger a Denial?
So far in 2017, fewer than 2 percent of the WBE applications received by the WBDC have been denied. We find that many denials are caused by outdated legal documents that no longer reflect the company’s managerial structure or operations.
For instance, let’s say a company that used to be owned by a father has been passed to his daughter. While the ownership documents
were changed, the father still retains legal control due to bylaws that were never properly updated—and so that company would be denied WBE status. Such a denial could be avoided by ensuring that your company’s legal documents are current.
A change in ownership, control or operation can also be another common pitfall for recertification denial. A woman owner’s involvement and percent of ownership must not fall below 51 percent.
These guidelines ensure WBENC certification maintains its value and certified WBEs continue to access quality corporations.
Can you appeal a denial of certification?
If your company is denied certification, you may appeal within 30 days by providing, in writing, your arguments and evidence as to why you are majority woman-owned, -controlled, -operated and -managed. Your appeal will be considered by a committee of trained volunteers, and if unsuccessful, you may then appeal to the national WBENC appeals committee. During the period of the appeal, your company will not be WBENC-certified.
If the denial is a result of a documentation issue that you are able to resolve, you can reapply after six months. However, the best way to avoid denial is to check your documents before application and reach out to us if you have questions.
If you have any questions about the certification process or whether you qualify, you can join the WBDC for its upcoming series, “Leveraging Certification,” on Oct. 25, or contact
Ann DeAngelo at adeangelo@wbdc.org or (913) 971-1050.
