We’re back with our final post in our series on gaining or recertifying your MWBE status in New York State. We’ve talked about the ownership requirement, the operation requirement, the control requirements, and the independence requirements. We hope they’ve been useful.
Today, we’ll be talking about the other miscellaneous criteria that the regulations require. This includes the owner’s personal net worth requirement, the small business requirement, and the authorization requirement.
Make sure to check these off, one by one, in order to ensure you’re eligible for certification as a minority or woman owned business.
Personal Net Worth
This requirement is plain and simple. The owner who is a minority group member or a woman can’t have an individual personal net worth that exceeds $15 million at the time of application. What’s that mean? So long as your net worth is under $15 million, you meet this criteria.
Small Business Requirement
Any company seeking MWBE certification must be a small business. The regulations define a small business as a company that doesn’t employ more than 300 employees. This is a very strict requirement. The New York State Division of Minority and Women’s Business Development simply won’t certify a business that has even a single employee more than 300. So if you’ve got 301 employees, don’t look for certification under the current rules.
But what if you have seasonal employees? Or what if you’ve got a lot of part-timers.
The math isn’t on your side, unfortunately. The Division may look at your IRS Form 941 to determine how many employees received wages, tips, or compensation in the 12 months leading up to your certification appliation. This inquiry proved to Owen Steel Company, Inc., for example, as the Division used this process to determine that the business had 306 employees and thus wasn’t a small business as required.
Authorization To Do Business
Your company must be authorized to do business in the State of New York and demonstrate that it’s actively conducting business in New York. This means the company must “make a contribution to the New York State economy through payment of taxes, or the purchase of made in New York State products and materials or has any payroll in New York State.”
Put simply, the company must demonstrate that it has either New York State tax returns, conducts business in New York, has employees in New York, or purchases materials in New York. If none of these requirements is met, the Division will deny certification.
Miscellaneous Additional Requirements
The Division has numerous miscellaneous requirements that every applicant must meet in order to receive MWBE certification.
- The applicant may be required to provide documentation to support her claim of membership in a minority group;
- The applicant must allow the Department of Taxation and Finance to share company tax information with the Division; and
- The applicant must authorize the Department of Labor to share company tax and employer information with the Division.
If you’re worried about giving the Department of Taxation and Finance or the Department of Labor permission to share tax and employer information with the Division, rest assured. This information is kept confidential and given only to those in the Division who are a part of the certification application process.
All in all, while these requirements seem rather simple in comparison to those we’ve previously discussed, it’s incredibly important that you meet them. So create a list of requirements and check them off prior to your applying for certification. Just a single dollar over the personal net worth threshold or a single employee over 300 total employees within a year is enough for the Division to immediately deny your application.
What To Do
The process of applying for as well as for re-applying for certification can seem daunting. You can have an ally on your side that helps with the details and allows you to focus on scaling your business. Contact us today to help you navigate the New York State MWBE certification process.
