Being a Certified Woman-Owned Business Can Be a Great Benefit
When your company is a Certified Woman-Owned Business, you’ll have access to contracts and resources that can help your enterprise thrive. Here’s a guide to understanding the steps you need to take to help your business gain this valued certification.
Certification criteria
To be considered a Certified Woman-Owned Business, your company needs to meet several standards regarding its leadership structure and ownership. According to the U.S. Chamber of Commerce, in order to be designated as a woman-owned enterprise, your company must be based in the United States, operate for profit, and already be considered a small business, as defined by the Code of Federal Regulations. Furthermore, the company must be at least 51% owned by women who hold United States citizenship. Women must work at the company full time, occupy major decision-making roles, and hold the highest positions in the organization.
Companies that meet certain gross income and net worth criteria may also qualify for the designation of economically disadvantaged woman-owned small business. In order to have your company earn this title, it must first qualify as a woman-owned small business, have all of its assets valued at $6 million or less, and have a three-year adjusted gross income average of $350,000 or lower. On top of that, the company owner must have a net worth below $750,000, not counting income reinvested into the company and taxes, home and business equity, and money in retirement accounts.
Applying for certification
You can gain your woman-owned business designation through a free self-certification program or through a third-party certification process. To apply for self-certification, you’ll need to submit the following documents to the U.S. Small Business Administration: The birth certificates, naturalization papers, or current passports of each woman entrepreneur; and your company’s stock ledger and issued stock certificates.
Additional necessary documents include articles of organization and incorporation, including any partnership or joint venture agreements, voting agreements, and if applicable, any amendments to these documents; and an assumed/fictitious name certificate. If you’re applying to be recognized as an economically disadvantaged woman-owned small business, you’ll also have to submit three of the most recent W-2 forms and tax returns, along with all schedules and a copy of IRS Form 4506-T, for each woman owner and her spouse.
If you’d like to pursue third-party certification instead, the U.S. Chamber of Commerce recommends reputable organizations including the National Women Business Owners Corporation, the U.S. Women’s Chamber of Commerce, the Women’s Business Enterprise National Council, and the El Paso Hispanic Chamber of Commerce. Each entity imposes its own fees and requirements, so be sure to read the fine print before proceeding. And once you’ve been certified by a third party, send proof of your approval to the U.S. Small Business Administration.
Benefits of certification
Once you’re a Certified Woman-Owned Business, you’ll have access to additional opportunities for growth. The U.S. Small Business Administration explains that a minimum of 5% of the country’s federal contracting dollars have been set aside for Certified Woman-Owned Businesses. While this can be lucrative if you’re in the right industry, remember that this set-aside only applies to federal contracts, not private sector agreements.
If you need help applying to become a Certified Woman-Owned Business, contact a business advisor or browse the U.S. Chamber of Commerce website for recommended support programs.
