Current through Register Vol. 49, No. 18, September 16, 2024
PURPOSE: This rule establishes a program by which
Minority Business Enterprises (MBEs) and Women's Business Enterprises (WBEs)
may be certified by the Office of Equal Opportunity (OEO).
(1) Any firm desiring to obtain certification
as a Minority Business Enterprise (MBE) or Women's Business Enterprise (WBE)
shall submit an application and required documentation to the Office of Equal
Opportunity (OEO), and be registered and in good standing with the Missouri
Secretary of State, if applicable. There are two (2) methods to obtain
certification-initial/standard and rapid response.
(2) An applicant is required to submit to OEO
documentation related to the legal structure, ownership, and control of the
firm that is necessary to determine eligibility for certification. Such
documentation may include, but is not limited to: Articles of
Incorporation/Organization, shareholder meeting minutes, bylaws or operating
agreements, board meeting minutes, partnership agreements, stock ledgers and
certificates, tax returns, lease and loan agreements, bank account signature
cards, and joint venture agreements.
(A) The
application must be signed by all of the applicant firm's minority or women
owners who are in control of the firm. The application must include a statement
attesting to the accuracy, completeness, and truthfulness of the information on
and accompanying the application form.
(B) Each application received shall be
reviewed by OEO for completeness, and the applicant firm will be notified in
writing by OEO of any additional information required. The additional
information requested must be received within a maximum of thirty (30) days
from the date on the notice for additional information or as otherwise
specified in writing by OEO. After that period, if the additional information
required has not been received by OEO and no extension of time has been
requested and granted in writing, OEO may deny the application for the firm's
failure or refusal to provide the relevant information requested by
OEO.
(C) After all required
information is received, an on-site visit to the office(s) of the applicant
firm whose principal place of business is located in Missouri and possible
visits to job sites at which the firm is working in Missouri, may be scheduled
by OEO. OEO will not make an on-site visit to a firm whose principal place of
business is outside of Missouri, but will contact the firm's home state (or
another certifying entity) for a copy of its on-site visit.
(3) An applicant seeking
certification has the burden of demonstrating to OEO, by a preponderance of the
evidence, that it meets the requirements of section
37.020,
RSMo, and these regulations.
(4)
Initial/standard certification and a rapid response certification are effective
for three (3) years from the date of issuance. Joint venture certifications are
effective for either two (2) years or the term of the joint venture, whichever
occurs first.
(5) Rapid Response
Certifications. An applicant who possesses a current M/WBE certification or
equivalent from another qualified certifying entity as determined by OEO may
apply for certification through OEO's rapid response application process. The
on-site review report from the primary certifying entity must be received by
OEO. OEO shall provide a list of qualified certifying entities. Certification
by another certifying entity does not guarantee certification by OEO regardless
of the other certifying entity which may have previously or currently certified
a firm as a M/WBE, OEO will make an independent determination of whether the
applicant firm will be certified.
(6) If an applicant is approved for
certification, a notice of approval and a certificate will be sent to the
Minority and/or Women's Business Enterprise (M/WBE) by OEO. Such certification
may identify the specific category or categories of work or industry code(s) in
which the firm is certified. The firm and its pertinent information, including
any approved specific categories of work shall be added to OEO's
directory.
(7) A firm certified by
OEO must notify OEO in writing of any changes that may affect its eligibility
for continued certification under section
37.020,
RSMo, and these regulations within thirty (30) days of the effective date of
such change. The notice must provide supporting documentation describing in
detail the nature of such change(s).
(8) An applicant denied certification or
whose certification is revoked will be notified in writing of the reasons for
denial or revocation. Reasons may include, but are not limited to: incomplete
or inaccurate application, failure to provide requested information, failure to
meet certification standards, or failure to cooperate during the certification
process. If OEO denies or revokes a certification, an applicant may appeal to
the commissioner. The appeal shall be in writing and addressed to the
commissioner. The appeal shall be received by the commissioner no later than
twenty-one (21) calendar days from the date of the denial or revocation
notification. Appeals received by the commissioner after twenty-one (21)
calendar days will not be considered. The appeal shall clearly state why the
denial or revocation is alleged to be in error. Information that was requested
but not provided before the denial or revocation will not be considered in an
appeal. The commissioner's decision shall be final. Applicants denied
certification or revocation are ineligible to reapply for one (1) year from the
date of the denial or revocation notification.
(9) A third party who has reason to believe
that an applicant has been wrongly denied or granted certification as an M/WBE
or joint venture may file a third-party challenge with OEO. A challenge by a
third party is not considered an appeal.
(A)
The third-party challenge must be submitted in writing with supporting
documentation in sufficient detail to support the allegations. OEO may require
additional documentation from the challenger.
(B) The third-party challenge must contain
the name, address, telephone number, and signature of the challenger.
(C) Third-party challenges will not be
considered confidential.
(D) OEO
will review the complaint and related material concerning the firm in question,
including available material from other sources within or outside OEO. OEO may
conduct an investigation, including requests for information or documentation
and unannounced site visits. However, OEO is not obligated to conduct any
investigation beyond a document review. At an appropriate time in the complaint
investigative phase, OEO will notify the certified firm in writing that a
complaint alleging the firm's ineligibility has been filed. OEO may request
additional information from the firm relating to the allegations.
(E) After OEO has reviewed the complaint and
conducted any investigation deemed necessary, OEO shall make a determination
whether there is reasonable cause to believe that the firm in question is
ineligible to be certified.
(F) If
OEO finds reasonable cause to believe that the firm is ineligible, OEO will
provide written notice to the firm that OEO proposes to find the firm
ineligible, setting forth the reasons for the proposed determination and
supporting documentation. If OEO determines that such reasonable cause does not
exist, it will notify the complainant and the firm in writing of this
determination and the reasons for it.
(G) If OEO notifies a firm of its
ineligibil-ity, the firm may appeal the decision to the commissioner pursuant
to the requirements of section (9) of this regulation.
(H) OEO may decline rather than deny
certification when one (1) or more questions are identified during the preview
for certification. Applicants declined certification will be notified in
writing and may respond with additional documentation or clarification within
the time frame stated in the notice.
(I) Firms shall cooperate fully with OEO's
request for information relevant to the certification process. Failure or
refusal to provide such information is grounds for a denial or revocation of
certification.
(10) OEO
will be guided by the following standards when evaluating applicants for
certification:
(A) In determining whether an
applicant meets the requirements of section
37.020,
RSMo, and these regulations, OEO will consider all information in its
possession;
(B) OEO will evaluate
an applicant based on current circumstances and will not deny certification
solely because an applicant was not owned or controlled by a minority or woman
at some time in the past;
(C) OEO
may authorize a one- (1-) year provisional certification in certain
circumstances, such as to allow time for a minority or woman to transition from
being an employee to a business owner, to allow entities who have not been in
business for at least a year to be certified, or to review tax information that
is not available for a new firm at the time of application;
(D) An applicant will not be denied
certification solely because it is a newly-formed firm; has not completed
projects or contracts at the time of its application; has not yet realized
profits from its activities; or has not demonstrated a potential for success;
and
(E) Per OEO's discretion, it
shall grant certification to a firm, and such certification may identify the
specific category or categories of work or industry code in which the firm is
certified. To become certified in an additional type of work after initial
certification, OEO may require the firm to demonstrate that it meets the
criteria for certification to perform that type of work. OEO shall not require
that the firm be recertified or submit a new application for certification, but
OEO may verify the minority or woman owner's control of the firm in the
additional category of work.
1. OEO shall use
categories or codes that describe, as specifically as possible, the principal
goods or services which the firm provides to its customers. Multiple categories
or codes may be assigned where appropriate.
2. OEO and the certified firm shall ensure
that the categories or codes listed in a certification are kept up-to-date and
accurate. The firm bears the burden of providing detailed company information
to OEO to make an appropriate designation.
3. If a firm and OEO agree that there is not
a category or code that fully or clearly describes the type(s) of work in which
the firm is seeking to be certified, the firm may request that OEO, in its
certification documentation, supplement the assigned category or code with a
clear, specific, and detailed narrative description of the type of work in
which the firm is certified. OEO may grant such request, if appropriate. A
vague, general, or confusing description is not sufficient.
4. OEO is not precluded from changing at any
time a certification classification or description if there is a factual basis
supported by documentation pursuant to the process identified in section (14)
of this regulation.
(11) Each year following the original date of
certification, OEO will notify each firm certified under this program. Each
firm must accurately, truthfully, and fully provide the requested information
and supporting documentation to OEO. The annual update information and
supporting documentation must be verified by all of the applicant firm's
minority or women owners who are in control of the firm. The verification shall
be in the form of a statement attesting to the accuracy, completeness, and
truthfulness of the information and supporting documentation. OEO may revoke
the certification of a firm that fails to complete and return the form. If
changes have taken place, the M/WBE must provide information and/or
documentation to substantiate that it continues to meet the requirements of
these regulations as required by section (7) of this regulation.
(12) OEO will notify a certified firm
approximately sixty (60) days before the expiration date of the certification.
However, regardless of whether the firm receives the recertifica-tion
notification, it is the firm's responsibility to timely submit the required
information and supporting documentation. If the recerti-fication update
materials and supporting documentation are received by OEO on or before the
certification expiration date, then the firm's certification will not lapse on
the third anniversary date after certification. While a timely recertification
application is pending, the prior certification shall continue until OEO rules
on the recertification request. If recertification information and supporting
documentation are not timely received by OEO on or before the anniversary date
of certification, then that firm's certification shall lapse, and the firm
shall no longer be certified as an M/WBE, and will be removed from the active
list of certified M/WBE vendors. Should a firm whose certification has lapsed
later apply for M/WBE certification with OEO, that firm shall remain without
M/WBE certification unless and until its new M/WBE certification is approved by
OEO. Recertification will be determined by information submitted on the renewal
update, tax returns, and any documented changes regarding ownership,
management, or control. Recertification is not guaranteed. Rapid response
recertification is subject to continued certification by another qualified
certifying entity as determined by OEO.
(13) Revocation of Certification.
(A) If, based on notification by the firm of
a change in its circumstances or other information that comes to OEO's
attention, a determination is made that there is reasonable cause to believe
that the currently certified firm is ineligible for certification in whole or
per certain categories or codes, OEO shall provide written notice to the firm
that OEO proposes to find the firm ineligible. The notice shall set forth the
reasons for the proposed determination and state the date by which the firm
must provide a written response to the proposed determination if it desires to
challenge OEO's determination. Reasons for ineligibility may include, but are
not limited to, a change in the firm's circumstance effecting eligibility such
as information not available to OEO at the time the firm was certified or
information relevant to eligibility that was concealed or misrepresented by the
firm; the firm's certification with OEO is based on certification by another
entity whose certification has been revoked; a change in the certification
standards or requirements; or OEO's decision to certify the firm was against
the weight of the evidence. The firm may respond in writing to the stated
reasons and provide arguments as to why the firm should remain certified. OEO
shall provide written notice of its final decision regarding the status of the
firm's certification. Firms found to be ineligible may appeal to the
commissioner pursuant to the procedures set forth in section (9) of this
regulation.
(B) OEO shall
immediately suspend a firm without adhering to the requirements in subsection
(14)(A) of this regulation when an individual owner, whose ownership and
control of the firm is necessary to the firm's certification, dies or is
incarcerated.
(14) OEO
will use the following standards in determining ownership:
(A) In considering whether a minority or
woman owns a firm, OEO will consider all relevant facts viewed as a whole,
including the origin of all assets and how and when they were used to acquire
the ownership interest in the firm. All transactions for the establishment of
ownership (or transfer of ownership) must be in the normal course of business,
reflecting commercial and arms-length practices;
(B) The contribution of capital or expertise
by the minorities or women to acquire their ownership interests in a firm shall
be real, substantial, and continuing, going beyond pro forma
ownership of the firm as reflected in ownership documents. Proof of
contribution of capital shall be submitted at the time of the application. When
the contribution of capital is through a loan, documentation must be provided
to OEO of the value of assets used as collateral for the loan. Examples of
insufficient contributions include: a promise to contribute capital,
capitalization not commensurate with the value for the firm, participation as
employee rather than a manager, or an unsecured note payable to the firm or an
owner or former owner who is not a minority or woman. Debt instruments from
financial institutions or other organizations that lend funds in the normal
course of their business do not render a firm ineligible, even if the debtor's
ownership interest is security for the loan;
(C) Securities held in trust, or by a
guardian for a minor, shall not be considered as held by a minority or woman in
determining the ownership or control of a firm. However, securities or assets
held in trust are considered as held by a minority or a woman for purposes of
determining ownership of the firm if-
1. The
beneficial owner of securities or assets held in trust is a minority or a
woman, and the trustee is the same or another such individual;
2. The beneficial owner of a trust is a
minority or a woman who, rather than the trustee, exercises effective control
over the management, policy-making, and daily activities of the firm;
or
3. Assets held in a revocable
living trust may be counted only if the same minority and/or woman is the sole
grantor, beneficia-r y, and trustee;
(D) In determining ownership of a firm,
assets or interests acquired in the following ways will be considered held by a
minority or woman:
1. From a final property
settlement or court order in a divorce or legal separation, provided that no
term or condition of the agreement or divorce decree is inconsistent with these
regulations; or
2. Through
inheritance, or otherwise because of the death of the former owner;
(E) Expertise of a minority or
woman applicant may be regarded as a contribution toward ownership if the
minority or woman has a significant financial investment in the firm and if the
expertise is-
1. In a specialized
field;
2. Of outstanding
quality;
3. In areas critical to
the firm's operations;
4.
Indispensable to the firm's potential success;
5. Specific to the type of work the firm
performs; and
6. Documented in the
records of the firm. These records must clearly show the contribution of
expertise and its value to the firm;
(F) Ownership and control of the firm by the
minorities or women must be real, substantial, and continuing. The minorities
or women shall enjoy the customary incidents of ownership and shall share in
the risks and profits commensurate with ownership, as demonstrated by the
substance, not merely the form, of arrangements. Any terms or practices that
give a non-minority or male a priority or superior right to a firm's profits,
compared to the minority or woman owner, are grounds for denial;
(G) The applicant must show that ownership
has not been acquired as a gift or by transfer without adequate consideration
from a non-minority or male, within one (1) year before application.
Thereafter, it is presumed that ownership is not held by the minority or woman
if received from a non-minority or male who-
1. Continues to be involved in the same firm
for which the applicant is seeking certification or is an affiliate of that
firm in a manner that suggests control of the firm;
2. Continues to be involved in the same or
similar line of business that suggests control of the firm; or
3. Is engaged in an ongoing business
relationship with the firm, or an affiliate of the firm, for which the
individual is seeking certification;
(H) To overcome the presumption in subsection
(15)(G), the minority or woman must clearly demonstrate to OEO that-
1. The gift or transfer to the minority or
woman was made for reasons other than obtaining certification; and
2. The minority or woman actually controls
the management, policy, and daily operations of the firm, notwithstanding the
continuing participation of a non-minority or male who provided the gift or
transfer;
(I) When
marital assets (other than the assets of the firm in question), held jointly or
as community property by both spouses, are used to acquire the ownership
interest asserted by a minority or woman spouse, OEO will deem the ownership
interest in the firm to have been acquired by the minority or woman with his or
her own individual resources, provided that the other spouse irrevocably
renounces and transfers all rights in the ownership interest in the manner
sanctioned by the laws of the state in which the spouse is domiciled. A copy of
the document legally transferring and renouncing the non-minority or male
spouse's rights in the jointly-held or community assets used to acquire an
ownership interest in the firm must be included with the firm's application.
OEO cannot count a greater portion of joint or community property assets toward
ownership than applicable state law would recognize as belonging to the
minority or woman owner of the applicant firm; and
(J) A contribution of capital may be real and
substantial even though financing agreements, contracts for the purchase or
sale of real estate or personal property, bank signature cards, and the like,
require the co-signature of a spouse who is not a minority or a
woman.
(15) OEO will use
the following standards in determining control:
(A) The minority or women owners must have
the power to direct or cause the direction of the management and policies of
the firm and to make day-to-day as well as long-term decisions on matters of
management, policy, and operations. There can be no restrictions upon the
minority or woman's discretion;
(B)
Only independent firms are eligible for certification. A firm is independent if
its viability does not depend on its relationship with another firm or firms.
In determining whether a firm is independent, OEO will consider the firm's
relationships with non-M/WBEs in areas such as personnel, facilities,
equipment, and financial and bonding support and other resources. OEO must
consider whether a present or recent employer/employee relationship between
minority or women owners of the applicant and any non-M/WBE firms or persons
associated with those firms compromise the independence of the applicant. OEO
will examine the firm's relationship with any applicable contractor to
determine whether a pattern of exclusive or primary dealings with a contractor
compromises the independence of the potential firm;
(C) There can be no restrictions through
corporate charters, by-laws, contracts, or any other formal or informal devices
(e.g., cumulative voting rights, voting powers attached to different classes of
stock, employment contracts, requirements for concurrence by non-minority or
non-female partners, conditions precedent or subsequent, executory agreements,
voting trusts, restrictions on or assignments of voting rights) that prevent
the minority or woman, without the cooperation or vote of any non-minority or
male, from making any business decision of the firm. This does not preclude a
spousal co-signature on documents;
(D) A minority or woman must hold the highest
official position in the firm (e.g., chief executive officer or president).
Board meeting minutes must be provided to verify the results of the most recent
officer election, if applicable;
(E) In a corporation, the minority or women
owners must control the board of directors. Shareholder meeting minutes and
by-laws must be provided to verify who is elected to the board and establish
who controls it. In a partnership, one (1) or more of the minority or women
owners must serve as general partners, with control over all partnership
decisions. A written partnership agreement must be provided. In a limited
liability corporation (LLC), the minority or women owners must be the managing
members. The operating agreement must be provided to OEO;
(F) Certification will not be denied solely
because non-minorities or males may be involved with a firm as owners,
managers, employees, stockholders, officers, or directors. Non-minorities or
males must not, however, have or exercise the power to control the firm, or be
disproportionately responsible for the daily operations of the firm;
(G) The minority or women owners of the firm
may delegate various areas of the management, policymaking, or daily operations
of the firm to other participants in the firm, regardless of whether these
participants are non-minorities or males. Such delegations of authority must be
revocable, and the minority or women owners must retain the power to hire and
fire any person to whom such authority is delegated. The managerial role of the
minority or women owners in the firm's overall affairs must be such that OEO
can reasonably conclude that the owner actually exercises control over the
firm's operations, management, and policy;
(H) The minority or women owners must have an
overall understanding of, and managerial and technical competence or experience
directly related to, the type of business in which the firm is engaged and the
firm's operations. The minority or women owners are not required to have
experience or expertise in every critical area of the firm's operation, or to
have greater experience or expertise in a given field than managers or key
employees. The minority or women owners must have the ability to evaluate
information presented by other participants in the firm's activities and be
able to use this information to make independent decisions concerning the
firm's daily operations, management, and policymaking. Generally, expertise
limited to office management, administration, or bookkeeping functions
unrelated to the principal business activities of the firm is insufficient to
demonstrate competency of the business's area of expertise and control over its
daily operations;
(I) If state or
local law requires the business to maintain a particular license or other
credential in order to own or operate a certain type of firm, then the minority
or women owners who exercise majority control of that type of business must
possess the required license or credential. If state or local law does not
require those persons to have such a license or credential in order to own or
operate such a firm, OEO will not deny certification solely on the grounds that
the minority or women owners lack such license or credential. However, OEO will
consider the absence of the license or credential as one (1) factor in
determining whether the minority or women owners actually exercise daily
control over the firm;
(J) OEO will
consider the difference in remuneration between the minority or women owners
and other participants in the firm in determining whether to certify a firm.
Such consideration shall be in the context of the duties of the persons
involved, normal industry practices, the firm's practices and policies
concerning the reinvestment of income, and any other explanations for the
difference offered by the firm. Based upon the evidence, OEO will make a
determination about whether a firm is controlled by its minority or women
owners, even though that owner's remuneration may be lower than other
participants in the firm. In a case where a non-minority or male owner has
formerly controlled the firm, and a minority or a female owner now controls it,
OEO may consider the difference between the remuneration of the former and
current controller of the firm as a factor in determining who exercises true
control over the firm, particularly when the non-minority or male owner remains
involved with the firm and continues to receive greater compensation than the
minority or female owner;
(K) In
order to be viewed as controlling a firm, a minority or female owner cannot
engage in outside employment or other business interests that could conflict
with the management of the firm or prevent them from devoting sufficient time
and attention to the affairs of the firm to control its daily activities. For
example, absentee ownership or management of a firm and part-time work in a
full-time firm are viewed as not exercising effective daily control over the
firm;
(L) Minority or women owners
may control a firm even though one (1) or more of the individual's immediate
family members (who themselves are not minorities or women) participate in the
firm as a manager, employee, owner, or in some other capacity. OEO will
consider how much control the minority or women owners exercise as compared to
other persons involved in the business, without regard to whether those other
persons are immediate family members;
(M) If OEO cannot determine that the minority
or woman owner versus the family as a whole actually controls the firm, then
the minority or female owners have failed to meet their burden of proof
concerning control, even though they may participate significantly in the
firm's activities;
(N) If a firm
was formerly owned and controlled by a non-minority or male who still remains
involved in the firm, then the minority or women owners seeking certification
must show that-
1. The transfer of ownership
and/or control to the minority or women owners was made for reasons other than
to obtain certification; and
2.
The minority or women owners actually control the management, policy, and daily
operations of the firm, notwithstanding the continuing participation of a
non-minority or male who formerly owned and/or controlled the firm;
(O) In determining whether a firm
is actually controlled by its minority or women owners, OEO will consider
whether the firm owns equipment necessary to perform its work. Lack of control
by a minority or woman owner will not be found solely because a firm leases,
rather than owns such equipment, if leasing equipment is a normal industry
practice, and the lease is not with a contractor or other party that
compromises the independence of the firm;
(P) Lack of control by a minority or woman
owner will not be found solely because a firm leases employees so long as the
minority or women owners maintain an employer-employee relationship with the
leased employees and are responsible for hiring, firing, training, assigning,
and otherwise controlling the leased employees;
(Q) A firm operating under a franchise or
license agreement may be controlled by a minority or woman even though the
franchise or license arrangement imposes restraints relating to standardized
quality, advertising, accounting format, and the like, so long as the firm has
the right to profit from its efforts, bears the risk of loss commensurate with
ownership, and meets all other requirements of section
37.020,
RSMo, and these regulations. Factors that indicate a lack of control by the
minority or woman owner include common management or excessive restrictions on
the sale or transfer of the franchise interest or license;
(R) In order for a partnership to be deemed
controlled by a minority or a woman, any non-minority or male partners must be
incapable of, without the specific written authorization of the minority or
female partners, contractually binding the partnership. A written partnership
agreement is necessary to establish both ownership and control;
(S) Recognition of a business as a separate
entity for tax or corporate purposes is not necessarily sufficient to
demonstrate that a firm is an independent business, owned and controlled by a
woman or minority; and
(T) A firm
that is owned by an Indian tribe or Native Hawaiian organization, rather than
by Indians or Native Hawaiians as individuals, may be eligible for
certification if otherwise qualifying. Such a firm must be controlled by
Indians or Native Hawaiians.
(16) An applicant that is not owned by
minorities or women, but is instead owned by another firm, even though that
firm is a certified M/WBE, is ineligible to be certified as an M/WBE except as
provided below:
(A) If the minority or women
owners own and control the applicant firm through a parent or holding company,
established for tax, capitalization, or other purposes consistent with industry
practices, and the parent or holding company, in turn, owns and controls an
operating subsidiary, OEO may certify the subsidiary if it otherwise meets all
requirements of these regulations. In this situation, the individual owners and
operators of the parent or holding company are deemed to control the subsidiary
through the parent or holding company;
(B) OEO may certify such a subsidiary as an
M/WBE if and only if the subsidiary is fifty-one percent (51%) cumulatively
owned by a minority or a woman. The following examples illustrate how the
provision for cumulative ownership works:
1.
Example 1: A minority or a woman owns one hundred percent (100%) of a holding
company which in turn has a wholly-owned subsidiary. The subsidiary may be
certified as an M/WBE, if it meets all other requirements of these
regulations;
2. Example 2: A
minority or woman owns one hundred percent (100%) of a holding company which,
in turn, owns fifty-one percent (51%) of a subsidiary. The subsidiary may be
certified, if it meets all other requirements of these regulations;
3. Example 3: A minority or woman owns eighty
percent (80%) of a holding company which in turn, owns seventy percent (70%) of
a subsidiary. In this case, the cumulative ownership of the subsidiary by a
minority or a woman is fifty-six percent (56%) (80% of 70%=56%). This is more
than the fifty-one percent (51%) threshold, so it may be certified as an M/WBE,
if it meets all other requirements of these regulations;
4. Example 4: A minority or a woman owns
sixty percent (60%) of the holding company, which, in turn, owns fifty-one
percent (51%) of a subsidiary. In this case, the cumulative ownership would be
thirty-one percent (31%) (60% of 51%=31%). This is less than the required
fifty-one percent (51%) threshold, so it cannot be certified as an M/WBE;
or
5. Example 5: Someone other than
the minority or women owners of the parent or holding company controls the
subsidiary. Even though the subsidiary is owned by minorities or women, through
the holding or parent company, it cannot be certified as an M/WBE because it
does not meet the control requirement.
(17) Joint Venture. As required by section
37.020.1(3)(b), RSMo, in order to qualify for joint venture certification, at
least fifty-one percent (51%) of the ownership interest in the joint venture
must be held by minorities, and the management and daily business operations of
the joint venture must be controlled by one (1) or more of the minorities who
own it. OEO shall require a joint venture applicant to submit documentation
including, but not limited to, a copy of the joint venture agreement and a copy
of the certification issued to the M/WBE participant in the joint venture. Any
changes proposed in the joint venture agreement must be filed with and approved
by OEO prior to the implementa- tion of the changes in order to maintain
certification. Failure to comply may result in revocation of the joint venture
certification.
*Original authority: 37.023, RSMo
1995.
