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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

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Code Series 800: ICT Codes of Good Practice for Qualifying Small Enterprises (QSE's)

2. Statement 801: Ownership for QSEs

 

2.1 The QSE ownership scorecard

 

The following table represents the indicators and method for calculating a score for ownership under this statement:

 

Category

Ownership indicator

Weighting points

Compliance target

2.1.1

Voting rights:


2.1.1.1

Exercisable Voting Rights in the Enterprise in the hands of black people

6

30%

2.1.2

Economic Interest:


2.1.2.1

Economic Interest of black people in the Enterprise

9

30%

2.1.3

Realisation points:


2.1.3.1

Ownership fulfilment

1

2.1.3.2

Net Value

9

2.1.4

Bonus points:


2.1.4.1

Involvement in the ownership of the Enterprise 2 10% by black women

2

10%

2.1.4.2

Involvement in the ownership of the Enterprise by black Participants in Employee Ownership Schemes, Co-operatives or Broad-Based Ownership Schemes

1

10%

 

2.2 Key measurement principles
2.2.1 General principles:
2.2.1.1 An Enterprise receives points for participation by black people in its rights of ownership, using the QSE ownership scorecard. Black people may hold their rights of ownership in a Measured Enterprise as direct Participants or as Participants through a business such as:
· a company with shares;
· a close corporation;
· a co-operative;
· any form of juristic person recognised under South African law;
· a partnership or other association of natural persons;
· an Employee Share Ownership Scheme;
· a Broad-Based Ownership Scheme; and
· a trust.
2.3 Realisation Points
2.3.1 Ownership Fulfilment occurs:
2.3.1.1 on the release of all black Participants in a Measured Enterprise from all third-party rights; or
2.3.1.2 if black Participants have never been subject to any third-party rights.
2.3.1.3 A minimum score of 7 points for Net Value is a requirement for the award of the Ownership Fulfilment point.
2.4 The bonus points
2.4.1 A Measured Enterprise with 30% black Economic Interest, can receive a maximum of 2 bonus points for a 10% holding of Economic Interest by black women.
2.4.2 A Measured Enterprise with 30% black Economic Interest, can receive a maximum of 1 bonus point for a 10% holding of Economic Interest by black Participants in:
2.4.2.1 Employee Share Ownership Schemes;
2.4.2.2 Co-operatives; or
2.4.2.3 Broad-Based Ownership Schemes.
2.4.3 A Qualifying Small Enterprise may benefit from any of the other statements in the Code series 100. When electing to benefit from any of those statements, the provisions of those statements apply to the Qualifying Small Enterprise.
2.4.4 The Qualifying Small Enterprise Ownership Scorecard remains applicable to Qualifying Small Enterprise's even if they benefit from other statements in the Code series 100.
2.4.5 Any interpretation or calculation of a QSE's score for ownership must be made in accordance with statement 100.
2.4.6 Without limiting the generality of the preceding clause, the following matters dealt with in code 100 apply expressly to QSEs -
2.4.6.1 The Flow-Through Principle
· Specific rules on certain types of enterprises (Broad-Based Ownership Schemes; Employee Share Ownership Schemes and Trusts).