Is ownership by a trust allowed for 8(a) certification?

8(a) regulations require that ownership in the firm by one or more disadvantaged individual(s) be direct ownership. Generally, SBA does not consider ownership by a trust to be direct ownership. However, ownership by a trust, such as a living trust, may be considered the functional equivalent of direct ownership if the following conditions are met:

  •     The trust is revocable;
  •     The disadvantaged individual is the grantor of the trust;
  •     The disadvantaged individual is a trustee of the trust; and,
  •     The disadvantaged individual is the sole current beneficiary of the trust.

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