Definition of an MBE
An MBE is a for-profit business that is at least 51% owned, controlled, and operated by one or more U.S. citizens who are members of a recognized minority group, as defined by NMSDC certification standards.
What Qualifies as a Minority Business Enterprise (MBE)
The National Minority Supplier Development Council (NMSDC) defines a Minority Business Enterprise (MBE) as a for-profit business that is at least 51% owned, operated, and controlled by one or more individuals who are members of a recognized minority group and U.S. citizens.
For purposes of MBE certification, a recognized minority group member is an individual who is a United States citizen and who identifies as Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American, as defined by NMSDC certification standards.
Ownership by minority individuals must be real, substantial, and continuing, and must reflect actual authority over the business’s strategic direction, day-to-day operations, and decision-making.
In the case of a publicly owned company, minority ownership must represent at least 51% of the outstanding equity and confer corresponding control, consistent with NMSDC certification requirements.
MBE certification is an ownership-based eligibility designation and does not guarantee contracts, confer procurement preferences, or restrict participation in the marketplace.
Frequently Asked Questions
NMSDC’s certification standard is based on the applicant having the ability to provide the following requirements. An application, documentation and site visit is required for all applicant to ascertain the requirements are met:
- Minorities must own and control at least 51% of the business
- Minority owner(s) must serve as President or CEO (if both positions exist)
- Minority owner(s) must be active in daily management
- Minority owner(s) must be a U.S. citizen
Ownership is established through the documents uploaded with your application. An example of the required document is listed below based on the legal organization of the applicant business:
- 100% of the assets of a sole proprietorship
- At least 51% of the equity interests in a partnership
- At least 51% of each of the classes of voting stock and 51.0% of the aggregate of all stock outstanding determined by the percentage that would be distributed to the Minorities if the corporation was liquidated
- At least 51% of the membership interests in a limited liability company
A minority has control of the business if she / he is the final decision maker for all aspects of the business — financial, production, contracting, etc. — or she / he may have delegated that authority to an employee manager or another partial owner. A primary indication that a Minority actively participates in the management and has control of the business is that she / he meets one of the following criteria:
- 100% of the control of a sole proprietorship
- At least 51% of the control of a general partnership
- A Minority owner is the general partner (or the managing general partner if there is more than one general partner) of a limited partnership or limited liability partnership
- A Minority is the sole manager, able to appoint unconditionally the majority of managers of a manager-managed LLC or has 51% control of a member-managed LLC
No, it is much easier. Unless there has been a change in the ownership, management and control of your business, very little paperwork is required. For re-certification, MBEs are required to provide financial documents, current tax forms and any updates to their certification application.
Ready to Get Certified?
If the above applies to you and your business, you can learn more about the certification process, explore the types of certifications available, and review the required documentation.
Certification fees are based on business size and will be shared during the process. Documentation to verify minority status will be required.
Our national certification team is here to guide you every step of the way.