SCMBDC: Join SCMBDC : FAQs

The following is a list of frequently asked questions and suggested guidelines regarding SCMBDC's MBE Certification Application.

What is a Minority Business Enterprise (MBE)?
An MBE is a for-profit enterprise, regardless of size, physically located in the U. S. or its trust territories, which is 51 percent owned, managed, operated and controlled by an ethnic minority or a group of ethnic minorities on a day-to-day basis.

What is an ethnic minority?
An ethnic minority is an individual whose origin or heritage is of or from:

any of the Black racial groups of Sub-Sahara Africa (African-Americans)

any of the Spanish speaking countries of Latin America, Mexico, Central America, South America, the Caribbean and Brazil (Afro-Brazilian and Brazilian Indians only) (Hispanic-Americans)

American Indian, Eskimo, Aleut or Native Hawaiian (Native Americans). Native Americans must be documented members of a North American tribe, band or organized group of native people indigenous to the continental U.S.

Bangladesh, Cambodia, China, Guam, India, Indonesia, Japan, Korea, Laos, Malaysia, Pakistan, the Philippines, Samoa, Thailand, Sri Lanka, Taiwan, the U.S. Trust Territories of the Pacific or the Northern Marianas and Vietnam. (Asian Americans, Pacific Islanders, Asian Indian Americans)

What groups are not considered ethnic minorities?
Individuals whose origins or heritage are of or from:

Iberian Peninsula (Spain, Portugal)

Asia Minor Region (Peninsula between the Black Sea and the Mediterranean)

Persian Gulf (Iran, Iraq, Saudi Arabia)

Northern Africa (Egypt, Libya, Morocco, Algeria)

What is MBE Certification?
MBE Certification is the process by which an applicant’s business status is validated by a certifying agency as being at least 51 percent owned, managed, operated and controlled by an ethnic minority or a group of minorities. SCMBDC certification is in accordance with NMSDC guidelines.

Who/what is National Minority Supplier Development Council, Inc. (NMSDC)?
Chartered in 1972, National Minority Supplier Development Council, Inc. (NMSDC) is the premier minority business advocacy organization in the U.S. SCMBDC operates and adheres to standards under an affiliation agreement with NMSDC, and By-laws and policies adopted by SCMBDC Board of Directors.

NMSDC’s vast network includes 39 regional Councils nationwide, more than 3,500 of the world’s largest publicly, privately, and foreign-owned corporations, and more than 15,000 MBEs. NMSDC’s objective has been the parity for minority-owned business firms within the free enterprise system.

Please visit our National Minority Supplier Development Council, Inc. (NMSDC) web page to learn more about the organization.

What is the cost of MBE Certification?
The cost of certification is a non-refundable fee of $275.

Beginning January 1, 2008, the non-refundable certification fee will be increased to $275.00.

How long is Certification valid?
MBE certification is valid for one year.

What is Re-certification?
Re-certification is the renewal of your MBE certification status, upon expiration of your annual certification. The process requires you to update your company and contact information (e.g., gross annual sales and financial information), and is not as extensive as the original certification process, except in cases of company name and ownership changes. The annual re-certification fee is $175.

Beginning January 1, 2008, the non-refundable re-certification fee will be increased to $175.00.

What is Reciprocal Certification?
Reciprocal Certification is the certification by an NMSDC affiliate council of an MBE already certified by the MBE’s home council, and whose certification is in good standing. The council from which you request reciprocal certification obtains a copy of your certificate from your home council to verify your standing, and upon receipt of your completed notarized reciprocal application, initiates the reciprocal certification process.

What qualifies me to become MBE-certified by SCMBDC?

Your company must be at least 51% owned, by an ethnic minority or a group of ethnic minorities on a day-to-day basis.

Owner(s) must be U.S. citizens. Green Card holders/resident aliens are not eligible for certification.

Your company must be headquartered in Southern California, and in SCMBDC’s service area, from the Mexican border on the South (except for San Diego county), the Arizona border on the East, and to Fresno on the North.

Additionally, we offer:

Exhibitor exposure at our annual Minority Business Opportunity Day, an event at which nearly 1000 corporate and MBEs participate, and at which 52% of the attendees say they receive tangible business opportunities.

Eligibility for “Supplier of the Year” nomination by one or more member corporations, which if selected as a local winner, may result in competing for the regional, and the national coveted “Supplier of the Year” award.

‘Mentor Protégé’ programs with our corporate members offering these programs.

E-Connections, our electronic communications forum that provides notices about upcoming SCMBDC programs, events and activities, including matchmaking and networking opportunities.

“Connections”, our Council newsletter which is filled with helpful tips, event updates on programs, services and activities, and inspiring MBE success stories.

Why is it important that suppliers be certified? Why do majority corporations often require NMSDC/SCMBDC certification before doing business with them?

Majority corporations are assured of NMSDC/SCMBDC certification quality. Our MBE certification is the most widely accepted ethnic certification due to our stringent certification requirements.

Members have supplier diversity programs that require valid MBE ownership (certification) to receive credit toward their supplier diversity goals.

Members source the NMSDC/SCMBDC MBE certified database for the diverse products and services MBEs offer, as well as for ethnic diversity.

Members want to contribute to the economic viability of MBEs and the communities in which they are located.

What is a “Member”?
A member is a large majority-owned corporation that pays local dues to a regional Council in which it is headquartered (local member), or that pays NMSDC dues and allocates service points to regional Councils whose services they utilize (national member). Among other things, Members support councils by sponsoring, promoting and participating in events and activities; volunteering their expertise and time; and hosting Council meetings and council activities. An MBE certified through SCMBDC is NOT a member.

What is MBISYS?
MBISYS (Minority Business Information Systems) is the database that contains all NMSDC regional councils’ MBE certified vendors and suppliers. A local member may access only its regional council database; a national member may access all 39 regional councils’ databases through MBISYS.

How long will it take to become certified?
Certification may take 45 to 60 days or more, depending on how complete your certification package is.

What is the process?
The process includes a desk audit by staff to ensure your application is complete, with all required support materials. Staff contacts you if any document is missing, and your application will be processed when all requested documents are submitted.

When staff’s desk audit is completed, your application and support materials are assembled for review by our Board Certification Committee. The Committee may request additional information, or approve the package. Upon Committee approval, a site visit is conducted. After the site visit, your application is submitted to the Board of Directors for ratification. You should receive your certificate within two weeks of Board ratification.

What is a Site Visit?
A site visit is a physical tour and on-site interview with your company’s owner(s), conducted by a trained Staff member, at the address provided in your application.

Am I required to complete every item in the application?
Yes, all items applicable to your company must be completed. If not applicable, type in N/A. If in doubt, call SCMBDC staff.

Will I need to supply all documents with my application?
All documents applicable to your business structure (corporation, LLC, sole proprietor, etc.) must be submitted with your application. If in doubt, call SCMBDC staff.

What documents are required to determine my eligibility of MBE status?
If your company is a Corporation, submit a copy of:
1. Certified Articles of Incorporation
2. Minutes of the First Board of Directors’ meeting or Board of Directors' Minutes for the same year your business started
3. By-Laws
4. Copies of Stock certificates front and back, if any, with Stock ledgers
5. Proof of Stock purchase
6. Third party agreements, such as rental or management service agreements.
7. Certificate of Qualification (if incorporated outside of California)
8. Income Statement
9. Corporate income tax return (11205) for one year preceding the year applying
10. Balance Sheets
11. Notes Payable, if any
12. Copy of Bank Signature Card or a Letter from Bank identifying the signers on your company's checking account
13. Business License
14. Facility Lease agreement, if any
15. Proof of citizenship
16. A brief history of Applicant's Business concern
17. Resume of all owner(s) or minority group members.

If your company is an LLC, Limited Liability Corporation, submit a copy of:
1. Income Statement
2. Income tax return
3. Balance Sheet
4. Notes Payable, if any
5. Copy of Bank Signature Card or a Letter from Bank identifying the signers on your company's checking account
6. Business License or if your company is located in an unincorporated area, provide a brief letter stating license is not needed
7. Facility Lease Agreement
8. Articles of Organization
9. Operational Agreement
10. Organizational Agreement
11. Proof of citizenship
12. A brief history of your Business
13. Resume of all owner(s) or minority group members.

If your company is a Partnership, submit a copy of:
1. Income Statement
2. Balance Sheet
3. Partnership Income Tax Returns (1065)
4. Notes Payable, if any
5. Bank Signature Card or a Letter from Bank identifying the signers on your company's checking account
6. Business License or if your company is located in an unincorporated area, provide a brief letter stating license is not needed
7. Partnership Agreement
8. Partnership Buy Out Rights Agreement
9. Partnership Profit Sharing Agreement
10. Facility Lease Agreement
11. Proof of citizenship
12. A brief history of your Business
13. Resume of all owner(s) or minority group members.

If your company is a Sole Proprietorship, submit a copy of:
1. Income Statement
2. Balance Sheet
3. Sole Proprietorship IRS Tax Form (1040, schedule C)
4. Notes Payable, if any
5. Bank Signature Card or a letter from Bank identifying the signers on your company's checking account
6. Business License or if your company is located in an unincorporated area, provide a brief letter stating license is not needed
7. Equipment and rental and purchase agreements
8. Management service agreements
9. Proof of citizenship
10. Fictitious Business Name Statement
11. Brief History of your Business
12. Resume of minority ethnic owner

Can a start-up business become certified by SCMBDC?
Yes, as long as it meets our certification criteria:

51% ownership by ethnic minority, or a group of ethnic minorities

Headquartered in Southern California within SCMBDC’s service area

I work out of my home. Does my company still qualify for certification?
Yes, your company may qualify for certification. Respond “yes” to "Is your business a home based business?" on page 1.

What is an 8(a) certification number?
An 8(a) certification number is assigned by the SBA 8(a) Business Development Program, upon your acceptance into their program. The SBA 8(a) Program assists small disadvantaged businesses compete in the American economy and access the federal procurement market. SBA’s web site is www.sba.gov/8abd/indexfaqs.html

What is and where can I find a D&B D-U-N-S Number?
A D&B® D-U-N-S® Number is a unique nine-digit sequence assigned by Dun & Bradstreet. Your D&B number enables potential customers, suppliers and lenders to easily identify and learn about your company. D&B’s web site is www.dnb.com.

What are NAICS codes?
NAICS (North American Industry Classification Systems) codes identify and classify your specific business industry category. Visit www.naics.com/search.htm for your appropriate product and service code(s).

Why do you ask for my financial information and what financial information will I need to provide?
Financial information is critical in validating a company’s business legitimacy, and is kept confidential. Depending on your business structure, you must provide:

If a Corporation: Income Statement, Balance Sheet and a Corporation Income tax return (1120, 11205) including all schedules for one year preceding the year of application

If a Sole Proprietorship: Income Statement, Balance Sheet and a Proprietor, IRS tax form (1040, schedule C)

If a Partnership: Income Statement, Balance Sheet and a Partnership Income tax return (1065)

If a Limited Liability Corporation (LLC): Income Statement and Balance Sheet

I am a new start-up business and my company has no financial or income statements at this time. What should I do? Can I still be certified?
A copy of your business plan, an opening balance sheet and projection of income for five years, or a statement by a certified public accountant (CPA), stating your company is a viable business may be submitted in lieu of financial or income statements. All documents submitted must show all applicable data, dated and signed by the proprietor, partner or authorized officer unless prepared by an independent CPA.

If the bank will not give me a “Bank Signature Card”, what should I do?
You may submit a letter signed by an authorized bank officer on the bank’s letterhead, listing the names of individuals who may sign for your company’s checking account.

I am the ethnic minority business owner; however, I do not sign checks and am not on the checking account for my company. Do I still qualify for certification?
Your inability to sign on the company’s checking account means you are not the owner, thus, you do not meet our MBE certification criteria.

What other documents may be used to prove my ethnicity?
You may use a Birth Certificate, Passport, or a U.S. Naturalization Citizenship Certificate. In lieu of a Birth Certificate, you may submit a notarized document indicating your identity, with your parents/grandparents birth information or government issued photo identification.

I am a Native American, how do I prove my ethnicity?
You must submit your tribal roll number or Blood Decree from your tribal registry, or an affidavit from someone in your tribal community who can vouch for your active membership in that tribe.

Will my company need a business license?
A business license requirement is determined by the area in which your company is located and the type of product or service your company provides. If located in an unincorporated area that does not require a business license, submit a brief statement to that effect with your application. Contact the County of Los Angeles Treasurer and Tax Collector, Revenue and Enforcement Division, on 213.974.2011, regarding business license requirements.

What is the Confidential Disclosure Agreement?
The Confidential Disclosure Agreement assures that your information will be kept in the strictest confidence.

What is a "DBA" and/or "FBN"?
A "DBA" stands for "Doing Business As." A DBA means a company is using a business name other than their real name; e.g., if John Smith’s business is "West Coast Plumbing" a Fictitious Business Name (FBN) registration is required. Or, if a Corporation, an LLC, a General Partnership uses a name other than the legal name under which the Corporation or LLC was filed, a FBN is required; e.g., lf a corporation's legal name is "Western Consultants, Inc.," and the company does business as "Westpro," a FBN is required.

What should I put under "Equipment Information"?
List basic equipment your company uses to function on a daily basis. If you use computers daily, list "computer" whether owned or leased.

What should I put under "Construction Information"?
This question refers only to companies in the construction industry.

What kind of "History" is required about my company?
Your history may be an overview of your company’s evolution, from start to the present time.

What is a company’s Certified Articles of Incorporation?
A Certified Articles of Incorporation certifies a company filed its articles of incorporation with the Secretary of State. It must be stamped by the Secretary of State and contain the state seal.

Which “Minutes” should my company provide?
The minutes of your Board of Directors’ first meeting or the most recent minutes within the first year your company was established.

I have yet to file my income taxes this year. What should I do?
You may submit a copy of your IRS letter extending your tax filing date, with your previous year’s income tax statement.

What is an "Affidavit of Applicant"?
An affidavit is a written declaration certifying that all the information you provided to us is true and correct to the best of your knowledge. This must be signed and dated by all owners of the company.

What are“Minority Group Members”?
Minority Group Members” are United States citizens who are Black, Hispanic, Asian and Native American. Ownership by minority group members means the business is at least 51% owned by such individuals or, in the case of publicly owned business, at least 51% of the stock is owned by one or more such individuals. Those minority group members control the management and daily operations.

If I am not a United States Citizen but I am a Resident Alien with a Green Card, is my business still eligible for certification?
Green Card holders/resident aliens are not eligible to be certified. However, as long as 51% of your company is still owned and operated by ethnic minorities with US Citizenship, your may still qualify for certification.

What is the definition of ownership as being the 51% owner?
The minority owner shall possess the power to direct or cause the direction of the management and policies of the business and to make the day-to-day decisions as well as major decisions on matters of management, policy and operations. It is the actual management of the business of those persons who have the ultimate power to hire and fire the managers. The minority owner should also carry a high rank in title as in CEO, President, etc.

What are Customer Business References?
Business references are companies who you do business with for profit who could give your company the approval of good business.

What is a Balance Sheet?
A balance sheet is financial snapshot of your company on one date. This report is useful when applying for a business loan or a year-end to get an accounting of your company's equity asset, and liabilities.

What is an Income Statement?
Profit and loss statements (also known as income statements) show your income and expenses over a period of time.

What are you referring to when you say "Plant"?
A "Plant" is a facility that a company owns that does not refer to their headquarters, but rather a particular facility that is owned and operated by the company. For instance, if a manufacturing company is headquartered in Los Angeles, but manufactures their products in New York, their New York facility would be considered their "plant".

If you are being asked for a Customer Reference, please identify the plant in which you do business with. For example, if your customer is a national corporation and is headquartered in Florida, but you do business with their San Diego plant, then type in "San Diego Plant" or what ever means the company uses to identify that particular plant.

If we are asking you for your "Plant Information", then we would like to have information on any plants that your company owns and operates.

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