(1) Fifty-one percent ownership interest.

Minority group members or women relied upon for certification must own at least 51 percent of the business enterprise for which certification is sought. Such minority group members or women must be United States citizens or permanent resident aliens.

(2) Capital contribution.

Minority group members or women relied upon for certification must demonstrate a capital contribution to the business enterprise for which certification is sought proportionate to their equity interest therein.

(3) Risks and profits.

Minority group members and women relied upon for certification must share in the risks and profits of the business enterprise for which certification is sought in proportion to their equity interest therein. In determining whether the profits of the business enterprise are shared proportionately with minority group members or women, the division may consider for example and without limitation, means by which the proceeds of the business enterprise are conveyed to individuals or entities.

(4) Customary incidents of ownership.

Minority group members and women relied upon for certification must not be encumbered in their ability to realize the benefits of ownership of the business enterprise for which certification is sought, or subject to undue restrictions against alienating such ownership interests.

(5) Pro forma ownership.

Ownership interests in a business enterprise may not be allocated to minority group members or women, either through business formation or the transfer of ownership interests, solely for the purpose of securing certification of such business enterprise as a minority- or women-owned business enterprise. Where a minority group member or woman relied upon for certification obtains his or her ownership interest in a business enterprise through a transfer from a male person who is not a minority group member, such minority group member or woman must demonstrate that such transfer was supported by reasonable consideration, and must meet all other certification criteria described herein.

(1) Competence in the industry. Minority group members and women relied upon for certification must possess adequate, industry-specific competence to make critical business decisions without relying upon other persons. This requirement cannot be satisfied by expertise or experience in office management or general business administration, among other things. In evaluating whether a minority group member or woman possesses adequate, industry-specific competence, the division shall consider factors including, but not limited to:

(2) Operational decisions.

Minority group members and women relied upon for certification must make operational decisions on a day-to-day basis with respect to the critical functions of the business enterprise for which certification is sought. The critical functions of a business enterprise shall be determined by the division based upon the following factors, but is not limited to:

(3) Time devoted to operation of the business enterprise.

Minority group members and women relied upon for certification must devote time on an ongoing basis to the daily operation of the business enterprise for which certification is sought.

(1) Control of business management.

A minority group member or woman relied upon for certification must be the highest-ranking officer of the business enterprise for which certification is sought, and, where applicable, control the board of directors or serve as a general partner. Any agreements describing the management of the business enterprise shall be consistent with the foregoing.

(2) Control of business negotiations.

Minority group members and women relied upon for certification must negotiate business contracts and represent themselves to clients as the principals of business entities for which certification is sought, as demonstrated by fully executed business agreements.

(1) whether the business enterprise shares resources with another entity, including, but not limited to, personnel, equipment, office space, warehouse and other storage space, and yard space;

(2) whether the business enterprise transacts business primarily with one other entity; and

(3) whether the business enterprise receives tangible benefits as a result of a connection to another entity, and whether such benefits are consistent with standard industry practices.

(1) Personal net worth.

Minority group members and women relied upon for certification must demonstrate an individual personal net worth at the time of application that does not exceed $15,000,000, as adjusted annually on January 1st for inflation according to the consumer price index of the previous year starting in 2020; or such other amount that the director shall determine on an industry-by-industry basis, based on, for example and without limitation, factual findings by the division concerning the individuals within the industries under consideration. Regulations relating to the classification of any industry-by-industry personal net worth thresholds above the $15,000,000 threshold shall, to the extent practicable, be implemented within six months of the completion of the division’s review needed to establish such thresholds, by the director.

(2) Small business requirement.

Any business enterprise for which certification as a minority- or women-owned business enterprise is sought must be a small business, as that term is defined in Part 140 of this Title.

(3) Authorization to do business.

Any business enterprise for which certification as a minority- or women-owned business enterprise is sought must be authorized to do business, and demonstrate that it actively conducts business, in the State of New York.

(4) Additional requirements.

The following requirements apply to all applicants seeking minority- and women-owned business enterprise status and inclusion in the directory or certified businesses: