The Small Business Administration’s (“SBA”) 8(a) Business Development Program is created to help small disadvantaged businesses compete in the American economy and access the federal procurement market. In order to participate in such program, you need submit a SBA application form.
Although it is not specifically required by the SBA 8(a) Business Development Program application process, we recommend that you have your business set up as some type of Hawaii business entity. To help you decide what business entity is best for you, you should first consult with your accountant who knows your personal financial situation.
With that being said, we recommend choosing a Hawaii business entity that would provide you with some type of personal protection. A Hawaii limited liability company would be a good choice because it provides you with the benefits of both a corporation and partnership: (1) corporate protection from creditors and (2) pass-through tax treatment.
Hawaii Requirements for Your Business Entity That You Must Know
Regardless of what Hawaii business entity you end up choosing, the SBA 8(a) Business Development Program requires that your Hawaii business entity be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals. At least 51% of the Hawaii business entity must be directly and unconditionally owned by socially and economically disadvantaged individuals. This issue should be addressed in the Hawaii Operating Agreement if you choose a Hawaii limited liability company as your business entity.
It is highly recommended that you seek consultation with a Hawaii attorney who is experienced in setting up Hawaii business entities, particularly Hawaii limited liability companies.
Contact us and, as your Hawaii lawyers, we can assist you in this process.
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