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Using the B-BBEE legislation to access Enterprise Development funding

Using the B-BBEE legislation to access Enterprise Development funding. BEE OVERVIEW. BEE has become a strategic focus for most businesses. Why? Licencing Preference policies of private sector (transformational agenda) Tenders Public perception

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Using the B-BBEE legislation to access Enterprise Development funding

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  1. Using the B-BBEE legislation to access Enterprise Development funding

  2. BEE OVERVIEW • BEE has become a strategic focus for most businesses. Why? • Licencing • Preference policies of private sector (transformational agenda) • Tenders • Public perception • 7 elements of BEE scorecard, each with a weighting • Ownership – 20 points • Management Control – 10 points • Employment Equity – 15 points • Skills Development – 20 points • Preferential Procurement – 20 points • Enterprise Development – 15 points • Socio-Economic Development – 5 points 25 points for each element of the scorecard for small businesses; they may pick any four

  3. Re-think and re-position • Potential areas in B-BBEE Codes that facilitate funding

  4. Re-think and re-position PAIN: - Points on BEE scorecard - No time to search for strategy aligned projects - BEE verification process - Play a positive role in society - Prepare integrated reports Non-Profit Sector Corporate SA PAIN: - Require income to meet objectives - Require recurring stable income

  5. Re-think and re-position • VALUE OFFERING: • Provide income to non-profit sector in exchange for services and Value Offering Non-Profit Sector Corporate SA • VALUE OFFERING: • Provide points on BEE scorecard • Provide credible offering aligned to NPO objective • Provide necessary documentation required by verification industry • Highlight and implement Corporate SA’s role in society • Describe value-add in context of integrated reporting requirements

  6. What does the Codes say about ED? • 3% of Net Profit after Tax needs to be spent on Enterprise Development initiatives (2% by entities who have a turnover of between R5million and R35million) • Objective of Enterprise Development: “assisting or accelerating the development, sustainability and ultimate financial and operational independence of that beneficiary”

  7. What does the Codes say about ED? • Who can benefit? • Black owned enterprises or 25% black owned enterprises with a level 6 BEE certificate Problem – NPOs typically do not have owners • Type of contributions and % claims for contributors • Grants • Loans • Equity • Human Resource Capacity • Shorter payment periods

  8. A possible solution NPO required to restructure as broad-based scheme or partner with BEE partner Corporate SED contribution NPO Skills spent in certain instances Procurement Dividend flow ED contribution (Pty) Ltd

  9. “What BEE certificates are required” NPO required to restructure as broad-based scheme or partner with BEE partner Independent Competent Persons Report - confirming qualification as BBOS Independent Competent Persons Report - confirming SED contributions qualify as SED for BEE purposes NPO Dividend flow BEE verification certificate for procurement purposes and/or Independent Competent Persons Report - confirming ED contributions qualify as ED for BEE purposes (Pty) Ltd

  10. THANK YOU

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