BEE requirements for small business
The Department of Trade and Industry on 20 December last year the so-called second phase draft codes issued for comment, and thereby shed new light on inter alia the role of family businesses and small business within the context of black economic empowerment (BEE). Under the codes are proposed in what manner various aspects such as qualifying small business, frontentiteite, multinational enterprises, art. 21 companies and other matters should be handled. Businesses are divided into three groups: micro-enterprises, eligible small businesses and large enterprises. The three types can be by gear ¯ identified are:
Micro-enterprises;
the proposal is that so-called micro-entities that are excluded from measurement. These are businesses whose annual turnover is less than the limit at which a company for value-added tax (VAT) registers. © Die limit is currently a turnover of less than R300 000 per annum. Businesses whose turnover does not exceed R300 000 per annum in excess, will be excluded from BEE requirements. Qualifying small businesses are as follows in the different sectors to determine:
If a company’s annual turnover exceeding R300 000 and the company’s number of employees and annual turnover is less than that limit, it is suggested that the company is classified as a qualifying small business for purposes of qualifying for empowerment. Such qualifying small businesses can choose to only five of the seven elements on the scorecard graded, in which case all the elements a weight of 20% had. The company may otherwise prefer to have six or seven elements to be graded. The total of the scorecard will be up to 125 points limited. The license is thus a flexible scorecard possible and a qualifying small business can choose which option to him most advantageous. Furthermore, it is suggested that a qualifying small business that a rating of 20% ownership on the score sheet to receive bonus marks. Black ownership of more than 50% is more rewarding because as a company’s empowerment status itself with a level increased as the black owner no restrictions as outstanding debt on the ownership and full management and control of the relevant percentage shareholdings may exercise.
Large businesses:
These are businesses which are not micro-enterprises and qualifying qualifies. Such businesses must meet the telkaartvereiste hundred points and seven criteria in order of their BEE status to be determined. What are the status levels of SEB in procurement is concerned; it is proposed that nine planes will be (as set forth in the table above right). During the grading of procurement will mean that the total value of purchases of goods, services and capital goods will be used and that the sum total of purchases from suppliers in terms of their different recognition levels as a percentage of total procurement expressed will. According will for every R1 at a level 4 contributor spent R1 credit for the calculations are added, while R1 is spent at a level 8 contributor only R1, 10 credit on the scorecard will mean. Although some targets such as skills development and overall procurement for qualifying small enterprises has been reduced, the draft codes in general ratings for some more technical in nature and fixed formulas are prescribed for grading.
It is obvious that the traditional small family business in micro-enterprises and qualifying small businesses will fall. In such a case, the criteria discussed above therefore apply. As a family business so a qualifying small business, he can with the flexible scorecard decided to only five of the seven elements meet. A qualifying small business has the option not to the ownership and management element to be measured. Another fascinating development is the definition of so-called front action in the new draft codes. Rating agencies are now obliged to take risks at each company in terms of indicators and formulas to determine what the status of a front company reduced the total scorecard gab “ignored the business on a blacklisted and / or criminal prosecution can be.
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