Certification: Truth or Myth?

We seem to be deluged with information about diversity certifications lately, and we’ve been unpleasantly surprised by how much of it is false or misleading. SDMWVLGBTQBE (Small Disadvantaged or Disabled, Minority, Women, Veteran, Lesbian, Gay, Bisexual, Transgendered or Queer Business Enterprise) owners already have a lot to juggle without being led down a costly path of misinformation. So, we’ll use our expertise to do some myth busting.

A brand new business can’t get certified. Partially true.  There are a few government certifiers that require the business to have been existence for a year, but they are rare.  If you’re concerned about getting certified as a new business, we recommend calling or emailing the agency to ask for their rules. 

An LLC doesn’t need an operating agreement. False. All certifiers require a copy of the LLC’s operating agreement.  This is the crucial document that establishes who has the right to govern and control your business. 

A bank signature card is required. Another partially true statement, but most certifiers will accept a letter from your bank.  It should be on bank letterhead, identify the name of your business and list the names and titles of people from your organization who are authorized to sign checks or other bank-related documents.

Must have current business tax returns. False, if you mean this year’s.  The wording by all certifiers is “most recent” tax return(s).  If you’re in the middle of a year (like November 2019) that mean last year’s return (e.g. fiscal year 2018).  And, this requirement  often does double duty.  Third party certifiers often accept personal tax returns in lieu of business taxes when the business has less than three years of taxes.

I can just send a bio. False, certifiers require a resume from a business owner(s). A resume is one of the ways certifiers confirm that an owner has knowledge of their industry and the ability to operate a company. This harks back to the eligibility requirement of the business needing to be at least 51% owned, operated, and controlled by a SDMWVLGBTQBE owner.  And, this resume needs to include information about what the owner(s) do for the business.  Certifiers want to know if the owner drives the business from a strategic planning and oversight position; and, if the owner is in charge of the money. 

Meeting minutes aren’t necessary. Partially true.  If you are a one person corporation, LLC or sole proprietor it doesn’t make sense that you have minutes of meetings you have with yourself.  (Note: Some certifiers may request that corporations or LLCs who have a sole owner provide a statement that there are no meeting minutes.) On the other hand, if the business has multiple owners or a board of directors, the certifier will want to see minutes of meetings showing how those board members were elected and minutes from the annual meetings of shareholders.

Don’t be blindsided by misleading information.  Ask the certifier, or drop us a line.  We’re happy to help.