If your business is at least 51% owned and operated by women, you may be eligible for certification as a women-owned business. The federal government aims to award at least 5% of all contract value to women-owned businesses each year, and sets aside certain contracts for economically disadvantaged women-owned businesses.
Earning the Women-Owned Business Certification gives you access to federal contracts and financial resources to help your company grow. Here's how to get certified as a women-owned business.
[Read: How to Get Certified as a Minority-Owned Business]
Authentication type
There are two types of certification: women-owned small businesses and economically disadvantaged women-owned small businesses. The qualifications for each application are as follows.
Women-Owned Small Businesses (WOSB)
To qualify as a WOSB, your business must be for-profit and meet the requirements for a small business as defined in the Code of Federal Regulations. Certain foreign companies may qualify under certain conditions, but their operations must be primarily based in the United States.
Additionally, your business must be at least 51% directly owned by women who are unconditionally U.S. citizens. Women must manage day-to-day operations, make long-term decisions, and hold the highest executive positions. There is also no minimum number of hours for a business to be considered up and running, but you must work full-time at the business during normal working hours.
Economically Disadvantaged Women-Owned Small Businesses (EDWOSB)
To qualify as an EDWOSB, your company must meet all of the WOSB requirements listed above, as well as additional financial requirements. A business owner's personal net worth must be less than his $750,000, and his three-year average adjusted gross income must be less than his $350,000. The fair market value of all assets must be less than $6 million.
These financial requirements do not include capital in your business and principal personal residence, income used to reinvest or pay business taxes, and funds invested in formal retirement accounts (if not accessible until retirement). yeah.
Businesses are divided into two categories: women-owned businesses and economically disadvantaged women-owned businesses.
How to be certified as a women-owned business
Before your business is eligible to apply for federal contracts, you must apply for certification. This can be done through a self-certification process or a third-party certification process. Neither process is “better” or preferred by governing bodies. It completely depends on your personal preference.
Self-certification as a WOSB or EDWOSB is free. To do this, apply directly through the U.S. Small Business Administration (SBA). Valid registration in the prize management system and the following documents are required.
- Birth certificate, naturalization document, or unexpired passport for each female business owner.
- Articles of Organization/Incorporation, Partnership or Joint Venture Agreements, Voting Agreements, and Amendments to These Documents.
- Issue stock certificates and share certificates.
- Pseudonym/Fictitious Name Certificate.
- Three most recent individual tax returns, including W-2s, and all schedules for each female business owner and her spouse (for EDWOSBs).
- IRS Form 4506-T, Request for Tax Returns for Each Female Business Owner and Her Spouse (for EDWOSB).
If your business has an 8(a) Certification for Ownership by Economically Disadvantaged Individuals and is also applying for EDWOSB Certification, submit the 8(a) Certification and Annual Report in lieu of the financial statements listed above. You can upload your review letter. These federal programs use the same criteria to determine certification eligibility.
Alternatively, you can obtain WOSB certification through one of four approved third-party organizations (specific requirements and associated fees vary by organization).
Once certified, you must submit proof of third-party certification to the SBA by uploading your current certification and joint venture agreement (if applicable). If you're looking for more women-owned businesses resources, check out our list of top programs that provide assistance to women-owned businesses.
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