Veterans in Business – Still Serving America

Verification Assistance ProgramPart 2

Specific Documents to Submit, Avoiding Pitfalls

Agenda Topics• Welcome, Introductions • Training Objectives • Verification – Initiation Process• Preparing for Verification

– Getting Started Activities– Types of Documents Needed

• Submitting Your Application• Pitfalls to Avoid

– Common Reasons for Denial– Common Reasons for Delays

• Next Training

Part Two – Training Objectives

• Understand Verification Initiation Process• Review key ‘Getting Started’ activities• Understand documents are required and

rationale• New Verification Counselor – Registration Site

http://www.va.gov/osdbu/veteran/vapTraining.asp

Initiation – Before You Start

• Prerequisites:– Read the “Guide for Applicants” on VetBiz.gov– Review 38 CFR Part 74 for ownership and control criteria– Review the Verification Assistance Briefs on VetBiz.gov for

more clarity on issues– Register with Dun & Bradstreet and in the System for

Award Management (sam.gov)– Gather all the documentations for your business type– Compare the business documents to the criteria in 38 CFR

Part 74, and ensure that there are no clerical errors on the documentation

What Documents are Needed for Verification?

What Documents are Needed for Verification? (continued)

What Documents are Needed for Verification? (continued)

What Documents are Needed for Verification? (continued)

What Documents are Needed for Verification? (continued)

What Documents are Needed for Verification? (continued)

How Does a Company Become Verified?

• Screen shots outlining the Verification process from beginning to end

Initiation – Getting Started

• Go to http://www.va.gov/osdbu/ and click the “Register-VIP” icon

Initiation – Create a User Account

Scroll to the bottom of the page and click “Create User”

Initiation – Register your Business“If you’re a new business to VetBiz”

Initiation – Check Qualifications• Check all boxes

that apply to your business

• Click “Create User”

Initiation – Check Qualifications (Continued)

Filing Out the VA Form 0877

• Read the VAF 0877 e-signature instructions, click “next”

• Fill out the form• If multiple owners,

click “Add Another Owner”

• When all owners are added, click “next”

Querying Information From SAM

• Make sure that you update your business information in SAM BEFORE YOU BEGIN THIS PROCESS!

Initiation – Agreement to the Terms

• Carefully read the text on the next screen

• Check the box to signify that you have read and agree to the terms outlined above

• Click “next”

Initiation – Personal Information• Enter your personal

information• This is used to check

Veteran and service-connected disability status in the Beneficiary Identification Records Locator Subsystem (BIRLS) database

Initiation – Signing and Submitting

• Click where indicated to sign

• On the next screen click “next” if you have viewed your completed VAF 0877

Initiation – Your profile• Click on your business name (red

arrow) to fill in business information• Much of this information is pulled

from your SAM profile• Click on the ‘Profile’ tab (yellow

arrow)• Set up your email notificationsNOTE: All correspondence relating to

your company will go to the email address used to register your company. Please ensure that it is correct.

Business Process Overview

Initiation – Upload Documents• Based on the business

structure selected earlier, the list of required documents appears here

• Upload scanned documents for each required document category

• If no document exists for that type (i.e. taxes for a new business), a letter of explanation is required

• Once all documents have been uploaded, click “submit”

Initiation - Submission• You will then see a screen that

confirms that you submitted the application

• This notice does not mean that the application is complete. All documents will be reviewed to see if they are sufficient for examination

• Once reviewed and determined sufficient, an email will be sent noting that the application is complete

• The 90-day processing time begins when the application is determined to be complete

Veteran status and service-connected disability are checked during the Initiation stage. The Veteran is alerted within 48 hours if there is an issue.

Common Reasons for Denial

Determining Veteran Ownership and Control• Ownership

– Applicant must be at least 51% unconditionally and directly owned by one or more Service-Disabled Veterans (SDV) or Veterans

• Control – One or more Veteran(s)/SDV(s) must conduct both the

day-to-day management and long-term decision-making for the Veteran/SDV-Owned Small Business

What are Some Pitfalls to Verification Pertaining to Ownership?

• Ownership must be unconditional. The Veteran owner must be able to transfer any or all of his ownership interest, to anyone, at any time, he/she pleases

• Ownership must not be subject to conditions that restrict transfer of the Veteran’s ownership interests to another

What are Some Pitfalls to Verification Pertaining to Ownership? (Continued)

• Veteran owners must always have the majority vote, either by representation on the board of directors or by weighted voting

• A corporation with two directors (one a non-Veteran) may use weighted voting to show that the Veteran has the majority vote

What are Some Pitfalls to Verification Pertaining to Ownership? (Continued)

• Weighted voting is defined as a system in which the participants have varying numbers of votes, typically by the number of shares of stock held

• If a transfer in ownership amongst immediate family members from a non-Veteran to a Veteran has occurred within the past two years, and the non-Veteran remains a stockholder, officer, director, or key employee, the non-Veteran will be presumed to remain in control of the concern

What are Some Pitfalls to Verification Pertaining to Ownership? (Continued)

• If a transfer in ownership amongst immediate family members from a non-Veteran to a Veteran has occurred within the past two years, and the non-Veteran remains a stockholder, officer, director, or key employee, the non-Veteran will be presumed to remain in control of the concern

• Supporting documentation reflecting management experience of the Veteran and evidence of the Veteran’s current participation in the management of the applicant must be provided to refute this presumption

What are Some Pitfalls to Verification Pertaining to Ownership? (Continued)

• Community property states create an issue for married Veterans

• In a community property jurisdiction, most property acquired during the marriage is owned jointly by both spouses and is divided upon divorce, annulment or death

• Joint ownership is automatically presumed by law in the absence of specific evidence that would point to a contrary conclusion for a particular piece of property

Community Property States

ArizonaCalifornia

IdahoLouisiana Nevada

New MexicoTexas

Washington Wisconsin

What are Some Pitfalls to Verification Pertaining to Control?

• Non-Veteran owner(s), manager(s) or board member(s) must not have the ability to overrule decisions made by the Veteran owner(s)

• The ability to remove board members at a shareholder meeting is generally not sufficient if the bylaws give the board the ability to make legally binding decisions without the approval of the Veteran owner(s)

What are Some Pitfalls to Verification Pertaining to Control? (Continued)

A firm is not verifiable if non-Veterans have the possibility to:

– Out vote Veteran(s)– Establish a quorum without the presence of the

Veteran(s)– Prevent the establishing of a quorum by their

absence– Preclude the Veteran owner(s) from making any

and all decisions on the firm

Common Delays in the Process

• Owner contact email/phone are not current• Documents were not submitted through the

VIP electronic process• Incomplete/incorrect documentation• Not checking the appropriate box for “status”

on VAF 0877• Missing/inaccurate percentages of ownership

on VAF 0877

Common Delays in the Process (Continued)

• Total percentage of ownership on VA 0877 not equaling 100%

• Not listing all owners on VAF 0877• Business name on VAF 0877 and VIP profile

mismatched• Veteran’s name on VAF 0877 doesn’t match

Veterans Benefit Administration (VBA) record

Revitalized OSDBU Web Site

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Summary

• Verification Process – Initiation Stage• Key ‘Getting Started’ Activities• Required Documentation• Screen Shots of Application Steps• Pitfalls to Avoid

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Next: Part Three – 38 CFR § 74.4 Review

• Understand Verification Initiation Process• Review key ‘Getting Started’ activities• Understand documents required and rationale• Understand resources available to Verification

Counselors – http://www.va.gov/osdbu/

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Veterans in Business – Still Serving America

Thank You!http://www.va.gov/osdbu/veteran/vapTraining.asp