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Office of Small & Disadvantaged Business Utilization

Control of a Limited Liability Company Brief

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Issue:  How can a Veteran provide evidence of control over a Limited liability Company (LLC)?

The Regulation

38 CFR § 74.4 – control of a Veteran-owned small business

  • (a) Control means both the day-to-day management and long-term decision-making authority for the VOSB.  Many persons share control of a concern, including each of those occupying the following positions:  Officer, director, general partner, managing partner, managing member and manager.  In addition, key employees who posses expertise or responsibilities related to the concern’s primary economic activity may share significant control of the concern.  The Center for Verification and Evaluation (CVE) will consider the control potential of such key employees on a case-by-case basis.

  • (e) In the case of a limited liability company, one or more Veterans or service-disabled Veterans must serve as management members, with control over all decisions of the limited liability company.

What This Means for an Applicant

  • The company documentation, such as the Operating Agreement of the LLC, should designate at least one Veteran who also holds an ownership interest as the “managing member” of the LLC.

  • The company documentation should not provide non-Veteran members with equal or greater authority over the day-to-day management and long-term decision-making of the LLC.

  • The Veteran designated as managing in the company documents must have control of the LLC and should provide demonstrable evidence of this ability to control in responses to CVE questions.

  • The Veteran designated as managing in the company documents must be able to make strategic management and day-to-day management decisions for the LLC without obtaining a non-Veteran’s consent and/ or a non-Veteran’s presence.

  • The Veteran(s) designated as the managing member(s) in the company documents must be able to demonstrate appropriate knowledge or experience commensurate with managing the particular concern at issue through a résumé or other appropriate documentation.

*For Informational Purposes Only*

This information has been provided by CVE for general informational purposes and should not be construed as providing legal advice.  You should contact your attorney to obtain advice with respect to any particular issue or problem.  In addition, CVE makes no representation as to the accuracy or whether the above information is currently up-to-date.  All applicants must read the applicable regulations and determine how best to meet these requirements.  The Verification Assistance Briefs do not constitute legal notice or replace the regulations.

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