Current through Register Vol. 46, No. 12, March 20, 2024
The following criteria shall be used to determine whether a
business enterprise is eligible to be certified as a minority or woman-owned
business enterprise.
(a) Ownership.
The following criteria regarding ownership shall be applied for the purpose of
determining whether an applicant should be granted or denied minority or
woman-owned business enterprise status, or whether such status should be
revoked:
(1) the contribution of the minority
group member(s) or woman owner must be proportionate to their equity interest
in the business enterprise, as demonstrated by, but not limited to,
contributions of money, property, equipment or expertise;
(2) the business enterprise must demonstrate
that it is an independent, continuing entity which has been actively seeking
contracts or orders and regularly and actively performing business
activities;
(3) a sole
proprietorship must be owned by a minority group member or women;
(4) a partnership must demonstrate that
minority group members or women have a 51 percent or greater share of the
partnership; and
(5) a corporation
must have issued at least 51 percent of its authorized voting and all other
stock to minority group members or women shareholders.
(b) Control. An eligible applicant must be an
independent business enterprise. The ownership and control by the minority
group member or women must be real, substantial and continuing and must go
beyond the pro forma ownership of business as reflected in the ownership
documents. The minority group member or women owner shall enjoy the customary
incidents of ownership and shall share in the risk and profits, in proportion
with their ownership interest in the enterprise. Determinations as to whether
minority group members or women control the business enterprise will be made
according to the following criteria:
(1)
Decisions pertaining to the operation of the business enterprise must be made
by minority group members or women claiming ownership of that business
enterprise. The following will be considered in this regard:
(i) Minority group or women must have
experience or technical competence in the business enterprise seeking
certification.
(ii) Minority group
members or women must demonstrate the working knowledge and ability needed to
operate the business enterprise.
(iii) Minority group members or women must
show that they devote time on an ongoing basis to the daily operation of the
business enterprise.
(2)
Articles of incorporation, corporate by-laws, partnership agreements and other
agreements including, but not limited to, loan agreements, lease agreements,
supply agreements, credit agreements or other agreements must permit minority
group members or women who claim ownership of the business enterprise to make
those decisions without restrictions.
(3) Minority group members or women must
demonstrate control of negotiations, signature authority for payroll, leases,
letters of credit, insurance bond, banking services and contracts, and other
business transactions through production of relevant documents.
