By: Katelyn J. Dougherty, Esq.

Originally Published November 30, 2020 – Updated September 10, 2022

What is a Woman-Owned Business Certification?

A Woman-Owned Business Certification, also known as a Women’s Business Enterprise (WBE) Certification, is a designation given to businesses that are at least 51% owned, controlled, and operated by women. This certification is issued by third-party organizations that verify the women ownership, and it can provide women-owned businesses with access to a variety of resources, such as government contracts, corporate supplier diversity programs, and funding opportunities.

Who Certifies Women-Owned Businesses?

There isn’t just one source of certification.  Both federal and private agencies provide this certification.

The Small Business Administration (SBA) provides the WOSB certification form on its website. Additionally, a business can also be certified as a WOSB by one of four SBA-approved organizations:

1. the National Women Business Owners Corporation;
2. the S. Women’s Chamber of Commerce;
3. the Women’s Business Enterprise National Council; and
4. the El Paso Hispanic Chamber of Commerce.

Types of Women-Owned Business Certifications to Know About.

In the United States, the Women’s Business Enterprise National Council (WBENC) is one of the largest third-party certifiers of women-owned businesses. Other organizations, such as the National Women Business Owners Corporation (NWBOC) and the Economically Disadvantaged Women-Owned Small Business (EDWOSB) also provide certification services for women-owned businesses.  See below for some additional information on each of the aforementioned organizations.

1. Women’s Business Enterprise (WBE): The WBE certifies a business that is at least 51% owned and controlled by one or more women who are U.S. citizens or Legal Resident Aliens; whose business formation and principal place of business are in the U.S. or its territories; and whose management and daily operation is controlled by a woman with industry expertise. This certification is more specified for companies that want to conduct business with companies in the private sector, nonprofits, state governments, or local governments.

2. Women-Owned Small Business (WOSB): The WOSB certification is a program organized by the SBA to give women-owned businesses more accessible access to the resources they need to grow their business. This certification offers the chance to compete on a more even playing field for federal contracts and gain access to resources tailored to promoting women in business.

3. Economically Disadvantaged Women-Owned Small Business (EDWOSB): An EDWOSB is a small business concern that is at least 51 percent directly and unconditionally owned and controlled by one or more women who are citizens (born or naturalized) of the United States and who are economically disadvantaged. A woman is presumed economically disadvantaged if she has a personal net worth of less than $750,000, her adjusted gross yearly income averaged over the three years preceding the certification does not exceed $350,000, and the fair market value of all her assets (including her primary residence and the value of the business concern) does not exceed $6 million.

What are the Benefits of a Woman-Owned Business Certification?

• Competitive Edge: A company that’s certified as a woman-owned business allows for a competitive edge in the marketplace, especially if you want to secure corporate or government clients. A Certification makes your business more visible to potential clients, especially concerning federal government agencies. Federal government agencies are required to give a certain percentage of contracts to women-owned businesses.
• Increased Networking Opportunities and Member Benefits: Organizations that certify women-owned businesses typically offer membership benefits, educational events, and networking opportunities.
• Tax Benefits: Federal, state, and local governments offer various incentives, loans, loan guarantees, and grants directly to women and minority business enterprises. Federal and state agencies also provide tax credit and capital gains tax waiver inducements to investors buying into minority-owned businesses.

What are the Requirements to Become Certified as a Woman-Owned Business?

The certification process typically involves a rigorous review of the business’s ownership, financials, and operations. The certification is often required by government agencies and corporations that have set goals or requirements for working with women-owned businesses. Requirements to become certified include:

1. The company must be considered a small business, which is defined by the SBA as a business having a maximum of 250-1500 employees (depending on the industry);

2. The business must be at least 51% owned and controlled by a woman (or women); and

3. The woman (or women) with at least 51% ownership and control must be U.S. Citizens.

What are the Requirements to Become Certified as an Economically Disadvantaged Business within the Women’s Contracting program?

1. The business must meet all the requirements mentioned in the section above;

2. The business must be owned and controlled by one or more women, each with a personal net worth less than $750,000;

3. The business must be owned and controlled by one or more women, each with $350,000 or less in adjusted gross income averaged over the previous three years; and

4. The business must be owned and controlled by one or more women, each with $6 million or less in personal assets.

Small Business Administration (SBA) Certification Requirements to Know About.

Effective July 15, 2020, there were changes to the certification process for WOSBs and EDWOSBs pursuant to the changes established by Congress to the Women-Owned Small Business Federal Contracting Program (WOSB Federal Contracting Program), as outlined in the 2015 National Defense Authorization Act (NDAA).

The new guidelines will make it easier for qualifying businesses to participate in the WOSB Federal Contracting Program. Additionally, the SBA is determined to improving its oversight of the process, and to maintaining the integrity of the certification process.

With the new guidelines come the following changes:

• The SBA will provide a new, free online certification process for WOSBs and EDWOSBs.
• The SBA will allow participation from firms certified by the U.S. Department of Veterans Affairs Center of Verification and Evaluations, provided they meet all eligibility requirements.
• The SBA will allow continued participation from businesses that utilize approved Third-Party Certifiers (TPC) to obtain WOSB or EDWOSB certification.
• The SBA will eliminate the current self-certification option from certify.sba.gov, effective October 15, 2020.

Read the SBA’s full article HERE.

Whether you’re looking for information about whether or not your business qualifies as woman-owned, or you need assistance with the tedious application process, contact our experienced team.

This Blog was written by Founding Attorney, Katelyn Dougherty.

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