Getting certified is just the first step. Next comes maintenance of that certification. Virtually all certifiers state that they MUST BE notified – usually in writing – within 30 days of any major change in your business. Below is a list of some, but not all, changes that would need to be reported:
- Ownership (new owners added, additional stock sold, retiring partners, etc.);
- Corporate By-Laws, Partnership or Operating Agreement Modifications;
- Change in Business Activities (such as new services or radical change in product lines);
- Officer, Director or Management Changes;
- New Business Structure (i.e. going from a Sole Proprietorship to a Corporation);
- Sharing Essential Personnel with Another Firm;
- Acquiring a Subsidiary or Competitor; or
- If certified as a disadvantaged business, when an Owner’s Personal Net Worth Exceeds $750,000
Some certifiers, like the State of Colorado, provide an Affidavit of Change for reporting purposes. For others, you simply write a letter that explains any change and provide documentation. As an example, if your business had a change in directors, you would provide a copy of the Board of Directors’ Meeting Minutes that reflects that change. Or, if there was a change in your company’s operating agreement, a copy of the new operating agreement should be included for the certifier’s records.
If there have been no changes to your business during the twelve month period after receiving certification, most certifiers will require an Affidavit of No Change. Most are a single page document that requires you to affirm that there have been no changes. Typically this affidavit must be notarized. A number of these affidavits request the business’s gross annual receipts (usually for the previous three fiscal years). Most also require a copy of the business’s taxes for the prior year. If the business is maintaining disadvantaged status, an updated personal net worth statement for disadvantaged owner(s) may be required.
Be sure to note when your certifier expects the annual affidavit to be received in their offices. Most require it between 30-45 days prior to your certification’s anniversary date. For example, if your certification is dated October 29th, 2010 your anniversary date would be October 29th, 2011. Depending on your certifier’s rules, this means your Affidavit must be received between September 14th and September 29th 2011. Most certifiers will mail out a letter or send an email to remind you that your annual update is coming due.
Beyond the annual update, most certifiers have a recertification process, which tends to be a somewhat shortened reprocessing of their initial certification application. However, some certifiers require that you go through the whole certification process again. This recertification process usually takes place on the third year of holding the certification and is known as the triennial review.
During the recertification process certifiers might require paperwork you’ve already sent in – for example: copies of stock certificates – to be resubmitted. Excluding documentation that you’ve previously provided during the recertification process can be cause for denial or decertification. To avoid decertification, keep a copy of your original application and all the supporting documents you provided. Do the same with any letters of change or affidavits of no change. Keeping a certification file will help you with the future maintenance of your certifications.
If the organization and maintenance of certification information and supporting documents seems overwhelming, be sure to check out the services offered at www.GetDiversityCertified.com.