Disadvantaged Business Enterprise and the Maryland Department of Transportation

By:  James R. Benjamin Jr., Esquire                                     jbenjamin@pklaw.com

What factors does the Maryland Department of Transportation (MDOT) consider when determining ownership of a corporation for purposes of eligibility for certification as a disadvantaged business enterprise (DBE)?

To be eligible for DBE certification, a corporation must be at least 51% owned by a socially and economically disadvantaged individual(s). Such individual(s) must own at least 51% of each class of voting stock outstanding and 51% of the aggregate of all stock outstanding.

Ownership must be real, substantial and continuing, and must go beyond pro forma ownership of the business as may be reflected in ownership documents. In addition, the owners of the business must enjoy the customary incidents of ownership as well as share in the risks and profits of the business commensurate with their ownership interests as demonstrated by substance, not merely the form, of the business’ arrangements.

Certification of a business can be a viable tool for developing and maintaining business relationships. Businesses seeking certification as a DBE in Maryland may want to consider obtaining legal advice concerning eligibility requirements for certification prior to applying for certification.

PK Law has extensive experience in Corporate and Business Services, including MBE/WBE/DBE  certification and other issues.  For additional information you can contact James R. Benjamin, Jr. at (410) 339-5787 or jbenjamin@pklaw.com.

 

This information is provided for general information only.  None of the information provided herein should be construed as providing legal advice or a separate attorney client relationship. Applicability of the legal principles discussed may differ substantially in individual situations. You should not act upon the information presented herein without consulting an attorney of your choice about your particular situation. While PK Law has taken reasonable efforts to insure the accuracy of this material, the accuracy cannot be guaranteed and PK Law makes no warranties or representations as to its accuracy.