If you are a woman-owned small business seeking woman-owned small business (WOSB) or economically disadvantaged woman-owned small business (EDWOSB) certification for use in seeking federal contracting opportunities, you need to be aware of the requirements for control of your business. Control means that one or more women must have the power to make decisions and direct the management and daily operations of the business.
To qualify as a WOSB, one or more women must unconditionally and directly own at least 51 percent of the business and must hold the highest officer position in the business. To qualify as an EDWOSB, one or more women who are economically disadvantaged must meet the same ownership and control requirements as a WOSB, and must also demonstrate that their personal net worth, income, and assets are below certain thresholds.
The SBA has specific rules for how to determine control of a WOSB or EDWOSB depending on the legal structure of the business, such as a partnership, a limited liability company, or a corporation. For example, in the case of a corporation, one or more women must control the board of directors by owning at least 51 percent of each class of voting stock and having the percentage of voting stock necessary to overcome any supermajority voting requirements.
Additionally, the woman or women who hold the highest officer position of the business must manage it on a full-time basis and devote full-time to the business during the normal working hours of businesses in the same or similar line of business. The woman or women who hold the highest officer position must also have the managerial experience and technical expertise necessary to run the business, or be able to demonstrate that they have ultimate managerial and supervisory control over those who possess the required licenses or technical expertise.
If you are a WOSB or EDWOSB and you want to participate in the federal contracting program, you must be certified by the SBA or an approved third-party certifier. You must also represent your status as a WOSB or EDWOSB in the System for Award Management (SAM) database and update your certification annually.
By meeting the requirements for control of a WOSB or EDWOSB, you can demonstrate your eligibility and competitiveness for federal contracting opportunities reserved for women-owned small businesses.
If you have any questions about WOSB or EDWOSB certification, the application process, or the appeal process, please contact Danielle Dietrich, Esq. at ddietrich@potomaclaw.com or 412-449-9141
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