Veteran-owned small business registry and government purchasing

It is a registry with verification, not a badge you award yourself. The law charges the administering entity with verifying a veteran small business owner’s ownership and control by implementing a regulation, and gives it concrete powers: approving that regulation using the law’s minimum guidelines, establishing the registry, preparing a promotion and marketing plan for the benefits, opening investigations and recommending action when it believes registration procedures were carried out fraudulently, and producing a statistics bank on the law’s progress and on who benefits from it. The law also defines a "service-disabled veteran" as a veteran with a service-connected disability, as recognized by the United States Department of Veterans Affairs.

For this Act, a "veteran" is any bona fide Puerto Rico resident who served honorably in the United States Armed Forces — Army, Navy, Air Force, Marine Corps, Coast Guard and Space Force — as well as in the National Oceanic and Atmospheric Administration Commissioned Officer Corps and the United States Public Health Service Commissioned Corps, and their successors in law, and who holds veteran status under current federal law. It includes people whose service in the Armed Forces reserve components or the National Guard meets those laws’ requirements. On the business side, the four conditions in Article 3(2) must all hold at once: 51% ownership or shares held by one or more veterans or the eligible surviving spouse; full-time control of daily management and operations; compliance with SBA small business parameters; and verification and listing in the Program’s registry plus SBA certification. A veteran’s surviving spouse may keep the classification of veteran-owned small business or service-disabled veteran-owned small business.

• That one or more veterans, or the eligible surviving spouse, own no less than 51% of the business or 51% of the shares.Verified against the official source
• That daily management and operations be controlled full time by one or more veterans or the eligible surviving spouse; if the veteran has severe or permanent disabilities, by their spouse or guardian.Verified against the official source
• That the business meet the small business parameters established by the Small Business Administration (SBA).Verified against the official source
• That ownership and control be verified and listed in the Program’s registry and certified by SBA.Verified against the official source
• That the eligible veteran have only one business at a time in the Program and work full time in that business.Verified against the official source

Information pending verification.

1. 1

   Step 1: Measure the 51% first

   It is the first condition and the one that decides whether to keep reading: one or more veterans, or the eligible surviving spouse, must own no less than fifty-one percent (51%) of the business, or fifty-one percent (51%) of the shares. If your business structure does not reach that, that is the work to do before any paperwork.

2. 2

   Step 2: Check that the control is real and full-time

   The law is not satisfied with ownership. It requires daily management and operations to be controlled full time by the veteran or eligible surviving spouse, and adds a rule people discover late: the Program requires the eligible party to work full time to establish control of the company, which means having only one business at a time in the Program. The written exception is for veterans with severe or permanent disabilities, where control may rest with their spouse or guardian.

3. 3

   Step 3: Match the size to SBA parameters

   The third condition points to a federal standard: the business must meet the small business parameters established by the Small Business Administration. And the fourth closes the circle: ownership and control must be verified and listed in the Program’s registry and certified by SBA. That is, local registration and federal certification travel together in the law’s definition.

4. 4

   Step 4: Get ready for the annual verification and the visit

   The registry is not permanent. The law orders an annual verification to confirm companies remain under the veteran’s ownership and control, and places on the owner the duty to immediately inform the Industrial Development Company if ownership or control changes. There will be document-review visits, focused on verifying management and control of operations, with an explicit purpose: to establish the company is genuinely independent and not the front for a non-veteran company employing the veteran on commission or fees. And it is the Industrial Development Company’s responsibility to visit the site where the company is located.

5. 5

   Step 5: If you are a surviving spouse, the classification holds

   Article 6(3) says it with no additional conditions in the text: a veteran’s surviving spouse may keep the classification of veteran-owned small business or service-disabled veteran-owned small business. And the Article 3 definition of small business incorporates them from the start, both in the 51% ownership and in the full-time control.

The Puerto Rico Industrial Development Company is, under Article 4, the entity charged with administering the Program: it approves the regulation, establishes the registry, makes the visits and produces the statistics. On the federal side, Small Business Administration certification is part of the law’s own definition, so that step runs through SBA and not through PRIDCO.

• Stopping at 50% ownership: the law asks for no less than 51% of the business or of the shares.
• Meeting the 51% but not the control: full-time daily management and operations by the veteran are required.
• Having several businesses in the Program: the law allows the eligible owner only one at a time.
• Registering locally and skipping SBA certification, which is part of the Article 3 definition.
• Ignoring the Small Business Administration’s size parameters.
• Not immediately reporting a change of ownership or control: it is an express duty of the owner and there is annual verification.
• Building a structure where the veteran is paid by commission or fees: the visits look for exactly that.

These are the government pages this guide is based on.

• Departamento de Desarrollo Económico y Comercio (DDEC)

  DDEC

  bvirtualogp.pr.gov