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DO YOU HAVE AN AFFILIATION? 

There were possible affiliates associated with the applicant firm. The SBA will apply the totality of circumstances if certain elements are found. Some elements (to name a few) can be identified as: Common ownership, similar or same line of business, and if the applicant firm and its affiliates share facilities, equipment, or personnel.  The employees of an affiliate may be counted as employees of the applicant concern for purposes of determining compliance with the HUBZone program's principal office and 35% residency requirements in certain circumstances.  In determining whether individuals should be counted as employees of the applicant firm, SBA will consider all information, including criteria used by the IRS for Federal income tax purposes and those set forth in SBA's Size Policy Statement No. 1. Employees of the concern's affiliate will not be counted as the concern's employees if there is a clear line of fracture between the concern and its affiliates.  The applicant firm must demonstrate to SBA a clear line of fracture between it and any affiliate in order for SBA to not count the affiliate's employees when determining the concern's principal office or compliance with the 35% residency requirement.  Based on your responses to the questions below, the SBA will determine if there is a clear line of fracture between the applicant firm and its affiliates:

  • Do the companies have common ownership?
  • Are the owners family members?
  • Do the companies have common management?
  • Do the companies share employees?
  • Are any of the shared employees key personnel?
  • Do any of the employees of the applicant perform work for the affiliate?
  • Do any of the employees of the affiliate perform work for the applicant?
  • Do the companies share office space?
  • Do the companies share utilities?
  • Do the companies operate in the same or similar line of business?
  • Do the companies operate in the same geographic location?
  • Do the companies share equipment?
  • Do the companies share customers?
  • Have the companies entered into any agreements together (e.g., subcontracting, teaming, joint venture, or leasing agreements)?
  • Do the companies share payroll or other administrative/support services?
  • Do the companies have joint finances?
  • Do the companies share a website?


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HUBZone Contractors National Council is a 501(c)6 non-profit organization.

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