It is important to ensure that you have your Enterprise & Supplier Development in place for your Broad-Based Black Economic Empowerment (B-BEE) verification.
Under the Codes of Good Practice generic scorecard, you are able to obtain 5 points under Enterprise Development and 10 points under Supplier Development. This is 15 points that can be guaranteed if you comply with the requirements.
The first requirement is that the Enterprise, as well as the Supplier Development Beneficiary, must be an Exempt Micro Enterprise (EME) or Qualifying Small Enterprise (QSE) with at least 51% Black Ownership. The Black Ownership should also be held by a person/s who are black as defined by the B-BBEE Codes of Good Practice. Please note that you cannot use the same beneficiary for both these elements. It needs to be separate entities.
Secondly, you need to spend the set targets on the beneficiaries within the financial year. The targets are as follow (for the generic Codes of Good Practice):
- 2% of Net Profit After tax for Supplier Development
- 1% of Net Profit After tax for Enterprise Development
Thirdly, with Supplier Development you need to ensure that you procure from the Supplier Development Beneficiary in the financial year.
However, keep in mind what the purpose is for Enterprise and Supplier Development – it is not just to obtain B-BBEE points, but also to assist entities to truly develop as sustainable businesses and contribute to the economy of South Africa as an operating business.
This is why SEESA clients are recommended to make use of Incuvest. They are an Enterprise & Supplier Development Incubator who ensure that the contributions made towards these 2 elements are spent in such a manner that it develops all the beneficiaries in their program. It also takes away the administrative side of these elements, as Incuvest already have all the required documentation and the beneficiaries comply with all the set requirements.
Please contact your legal advisor should you have any enquiries regarding these 2 elements or Incuvest and how the program works.
About the author:
Geralene van Wyk obtained her BA (Psychology) and LLB degrees from the North-West University. After her studies, she completed her articles in Pretoria and was admitted as a practicing attorney in 2006 and a conveyancer in 2007. She joined SEESA BEE in 2011 as a legal advisor and is currently a SEESA BEE National Training Senior Legal Advisor at the Pretoria Head Office.