Control is a Key Element in Determining Affiliation for SBA Small Business Size Determination

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The most common reason for contractors failing to meet the Small Business size standards set by the Small Business Administration (SBA) is because they are found to be affiliated with other companies, such that one company can effectively assert control over the other entity. When that element of control does not exist, SBA will not find affiliation for purposes of a size determination, even though the companies may interact with each other on a regular basis over time. Stated another way, just because companies have relationships with each other does not always mean that they are affiliated for purposes of an SBA size determination.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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