Handling Documentation Gaps

So, you want to get certified as a SDMWVLGBTBE (Small Disadvantaged or Disabled, Minority, Women, Veteran, Lesbian, Gay, Bisexual or Transgendered Business Enterprise) but the list of documents is overwhelming. And, in some instances, the business might not even have everything the certifying agency requires. We know many people who have decided not to pursue certification because they just don’t have the paperwork.

There are legitimate reasons why a business might be missing required documentation.  In our case, the business has moved several times, and we have actually scanned everything to our servers (and, of course backed these materials up in multiple locations!).  During a recent WBENC re-certification visit we were asked to show all of our original stock certificates … and discovered we couldn’t. Somewhere along the way (between 1984 and 2016), one or two got misplaced. We demonstrated that we could print the scanned copies and that seemed to suffice. Fortunately, we found the missing certificates when we finished unpacking (whew!) but even if we had not, we had accurate records in our stock ledger and scanned copies of the originals. Older paperwork can get lost, not just in a move, but a fire or a flood or just because it accidentally got thrown away. Before you apply for certification, make sure you have the business’s organizing documents and if some are missing, talk with your attorney about how to replace them.

Some documents can be retrieved from your state government, if you registered your business as a corporation, partnership, sole proprietorship or LLC.  Most Secretary of State Offices maintain a Bureau of Corporations (or similar name), where you can order copies of your original paperwork.

If you don’t have a required document, you can opt to write an explanation as to why; and sign and date the statement for each missing document. For example, if you have only been in business two years you won’t be able to provide three years of financial statements — common sense, right? Well, in many cases it is just easier to provide an explanation.  You could write — on business letterhead:  “XYZ Company was formed on DATE, and we only have two years of financial records.” The primary business owner should be the one to sign this statement (though if it takes two or more owners to make up the 51% ownership seeking certification, those owners should sign, too). Then scan the document into a Portable Document Format for submission and your records. If you consistently follow a process like this, you can easily offer an explanation as to why you legitimately can’t comply with providing a requested document.

When it comes to business tax returns, the certifiers require three years’ worth.  If your business hasn’t filed in multiple years, most certifiers will accept the owner’s personal tax return instead.  If you are certifying with a state program as a disadvantaged business, they’ll want three years of personal tax returns anyway.

Another often required document is a bank signature card, and sometimes proof of an opening deposit.  If your business is a little older, you might not have everything close at hand. Generally, your bank can provide you with a copy of the signature card — the document that says who can withdraw funds or sign checks. Often, they can provide a report on their letterhead which will detail when you opened the business account and verify its opening deposit. Depending on the structure of your business, the bank may have had you complete a resolution or other legal documents. If you can’t find yours, they are likely able to get you copies.

The best approach, take the list of documents from the certifying agency and just go through the checklist. If you get them all together, in one place, it will make it easier for you to complete the application. And if you’re going to do the work, we highly recommend scanning copies of what you’ve gathered and put them on a CD or flash drive in multiple locations.