MBE Certification Can Open Doors for Minority-Owned Businesses in Northern California

We work with businesses and entrepreneurs throughout the Sacramento area, helping them build and grow their companies and position them for continued success. Many of our clients are companies founded, owned or operated by ethnic minorities. As government agencies, private companies, universities, hospitals, and other entities continue to seek diversity in their supply chains and procurement process, certification of a business as a "Minority Business Enterprise" can provide minority-owned businesses with increased opportunities and access to potential customers and partners.

Although some minority-owned businesses self-identify, the term "Minority Business Enterprise" ("MBE") generally refers to businesses that have been certified by the National Minority Supplier Development Council ("NMSDC") which has affiliate offices across the country. For Sacramento and the rest of Northern California, the Western Regional Minority Supplier Development Council ("WRMSDC") provides certification, training, and related services to minority-owned businesses.

Certification has a number of advantages. Many government agencies and large corporations have launched initiatives to do business with minority-owned companies. When your application is accepted, your business is listed in the NMSDC's database of minority-owned suppliers and companies. That database allows corporate entities and government agencies to connect with members and opens a referral network across the country.

Additionally, several federal government agencies, such as the EPA, certify minority-owned businesses. Because these agencies also accept NMSDC certification as valid, applying for certification through the NMSDC is a relatively easy way to obtain MBE designation across the board.

Qualifying as a Minority Business

According to WRMSDC guidelines, to qualify for MBE certification, a business must:

  • be physically located in the United States or its trust territories
  • be 51% or more ethnic-minority-owned, operated, & controlled by a U.S. citizen
  • be owned, operated, or controlled as set forth above by members from the following groups: African American; Latino (and Afro-Brazilian); Asian American/Asian Pacific Islander; Asian Indian; Native American; and Native Hawaiian
  • be for-profit businesses

The NMSDC program defines minorities as individuals who claim at least 25 percent minority heritage in one of the four ethnic groups. Those with 25 percent minority ethnicity must provide the NMSDC with proof of their heritage.

Conversely, individuals whose ethnic heritage hails from following global regions do not qualify as minorities for MBE purposes:

The Iberian Peninsula (Spain and Portugal)

Asia Minor

The Persian Gulf (Iran, Iraq, and Saudi Arabia)

Europe

North Africa (Egypt, Libya, Algeria, and Morocco)

The NMSDC also accepts both privately-owned and publicly traded companies. If a business is publicly-owned, at least 51 percent of its stock must be minority-owned. Additionally, minorities must control its daily operations. Start-ups and home-based businesses also qualify for MBE certification.

MBE Certification for Northern California Businesses

To apply, companies must register with the WRMSDC office in Oakland. The application asks the prospective member a variety of questions about his business, including the number of employees, the annual revenue, and the nature of its operations.

Business owners must also supply the office with proper documentation, which may include financial statements, articles of incorporation, corporate bylaws, a copy of the owner's driver's license, and lease agreements. The WRMSDC provides a document checklist on its website for each type of business entity. The information requested for a limited liability company differs from that required of a sole proprietorship. Once the office receives the application and requested documentation, and the required filing fee, it conducts a site visit. This is a physical visit by a representative of the regional office.

If you are a minority-owned business in Northern California, obtaining MBE certification can be a tremendous asset. If you have questions about MBE certification or if you need any other assistance with your new or growing business, please give the experienced business attorneys at Meyer & Yee, LLP a call.

This article has been prepared by Meyer & Yee, LLP for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

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