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Can you get 8(a) Certified if you have a family member who is or has been 8(a) Certified?

One of the many questions we get is “Can I get 8(a) Certified if I have a family member who is currently or previously 8(a) Certified?

See below for the answer to this question.

First, the definition of an immediate family member means father, mother, husband, wife, son, daughter, brother, sister, grandfather, grandmother, grandson, granddaughter, father-in-law, and mother-in-law.

Secondly, per CFR §124.105   What does it mean to be unconditionally owned by one or more disadvantaged individuals?

(g) Ownership of another Participant in the same or similar line of business. (1) An individual may not use his or her disadvantaged status to qualify a concern if that individual has an immediate family member who is using or has used his or her disadvantaged status to qualify another concern for the 8(a) BD program. The AA/BD may waive this prohibition if the two concerns have no connections, either in the form of ownership, control or contractual relationships, and provided the individual seeking to qualify the second concern has management and technical experience in the industry. Where the concern seeking a waiver is in the same or similar line of business as the current or former 8(a) concern, there is a presumption against granting the waiver. The applicant must provide clear and compelling evidence that no connection exists between the two firms.

(2) If the AA/BD grants a waiver under paragraph (g)(1) of this section, SBA will, as part of its annual review, assess whether the firm continues to operate independently of the other current or former 8(a) concern of an immediate family member. SBA may initiate proceedings to terminate a firm for which a waiver was granted from further participation in the 8(a) BD program if it is apparent that there are connections between the two firms that were not disclosed to the AA/BD when the waiver was granted or that came into existence after the waiver was granted. SBA may also initiate termination proceedings if the firm begins to operate in the same or similar line of business as the current or former 8(a) concern of the immediate family member and the firm did not operate in the same or similar line of business at the time the waiver was granted.

The key here is that if you have an immediate family member who is a current or a previous participant in the 8(a) Program you will not be able to get 8(a) Certified if any of the below apply:

1. You had ownership in the immediate family members business at any time they were certified in the SBA 8(a) Program.

2. You were a key officer, director or partner in your immediate family members business when they were certified in the SBA 8(a) Program.

3. Your business conducted business with your immediate family members business in any shape or form (Contracts, Subcontracts, Loans, Funding, etc.).

4. Your business is in the same or similar line of business as your immediate family members business. Same or similar line of business means business activities within the same four-digit “Industry Group” of the NAICS Manual as the primary industry classification of the applicant or Participant. The phrase “same business area” is synonymous with this definition.

If your immediate family members business is no longer 8(a) Certified and you can show that you have not conducted business with them for the last three fiscal years you may be able to get 8(a) Certified.

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