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Minority-owned businesses may be entitled to government benefits and special programs, but not every business will qualify.
And claiming to be a minority-owned business when you're not is a terrible idea, as Moretech American Corporation has learned the hard way. Federal prosecutors allege Moretech passed off a shell company as a minority-owned firm in order to land a government contract; Moretech has agreed to pay $3 million to settle those claims, the New York Daily News reports.
So what exactly qualifies a business as a minority-owned business?
Each minority business program is allowed to define "minority" in its own way.
The National Minority Supplier Development Council (NMSDC) -- a group which reviews and certifies minority-owned businesses -- defines "minority group members" as U.S. citizens who are Asian, Black, Hispanic, and Native American. More specifically, the NMSDC requires eligible members to be U.S. citizens with at least "25 percent" Asian, Black, Hispanic, or Native American heritage.
The U.S. Small Business Association's (SBA) 8(a) Business Development Program allows socially and economically disadvantaged entrepreneurs to get access to government contracts. The SBA presumes that certain minority groups can qualify for its 8(a) Business Development Program -- African Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and "Subcontinent Asian Americans."
Though the SBA and others are open to considering minority groups from all areas, the categorization is mostly based on racial minority status.
If you have questions about your eligibility as a minority-owned business, consult an experienced business attorney in your area.
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