Summary of certification criteria
In order to qualify for MBE status, an applicant’s business must be owned, operated and controlled by U.S. citizens, a majority (at least 51%) of whom are racial or ethnic minorities. During the certification process it is the responsibility of the applicant to prove that his/her business meets these criteria. The National Minority Supplier Development Council (NMSDC) establishes these standardized requirements across the country.
- The company shall be owned by an ethnic minority in one of the represented groups.
- The principals must be U.S. citizens.
- The ethnic minority shall own, operate, and manage no less than 51% of the firm.
- The minority owners shall have complete and absolute control of the company, and be active in day-to-day management and daily business operations.
Proof of Minority Status
There is a stark difference between knowing that you are an ethnic or racial minority and demonstrating through documentation that you are one. The most common way for applicants to demonstrate their ethnic or racial background is by producing the birth certificate or death certificate of a parent or grandparent during the certification process.
Groups That Qualify as Racial or Ethnic Minorities
- African-American / Black
- Asian-Indian American
- Asian-Pacific American / Asian-Islander American
- Hispanic (non-European)
- Native American Indian
Proof of U.S. Citizenship
Applicants must also prove their United States citizenship. If you were born in the United States, you can prove your citizenship by providing your birth certificate. If you were born outside of the United States but have since become a naturalized U.S. citizen, you can prove your citizenship by providing either a naturalized passport or your naturalization papers.
Proof of Ownership
The applicant’s firm shall be an independent business, with an independent location and not a “sales arm” of a non-minority firm. The firm shall be an existing operation (not a start-up) with an existing contract or a firm that has an existing (documented) contract with one of the NMSDC Corporate Members. All equity investments shall be true and real, presented on the balance sheet (according to Generally Accepted Accounting Principles) and documented and correspond with all other legal documents.
Proof of Absolute Control and Day-to-Day Management
Complete control means the ethnic minority owners shall be able to act independently of the non-minority owners. The ethnic minority must demonstrate the “capabilities of managing” the firm.
If the company is a state chartered entity (i.e., corporation, limited liability company or a limited partnership), the ethnic minority person(s) must demonstrate the ability to manage and control the “chartered” entity, the other shareholders and/or the other unit holders.
The ethnic minority person(s) must have numerical control of the corporation’s Board of Directors and the limited liability company’s Board of Members. These operational and control facts must be documented in the corporate bylaws, limited liability company’s operating agreement or the partnership agreement.