Finally, sense prevails on broad-based black ownership

Minister of Trade and Industry, Ebrahim Patel has issued Practice Note GN 44591, clarifying the treatment and recognition of collective enterprises for ownership purposes under the B-BBEE Codes of Good Practice. Collective enterprises include Broad-Based Ownership Schemes (BBOS), Employee Share Ownership Programmes (ESOPS) and Trusts.

 This long overdue and much needed Practice Note clarifies and acknowledges that broad-based empowerment through collective enterprises was always, and remains part of the transformation agenda of the government. The Practice Note acknowledges that these structures benefit many black beneficiaries in terms of economic empowerment and/or access to the economy.             
Gazette 44591 provides clarity on the following issues:
  •  Rights of ownership of beneficiaries
  •  Discretion by the Trustees to identify beneficiaries and their allocate benefits
  •  Black minors are recognised
  •  Nature of benefits and “single purpose” schemes regarding dividends
  •  Measurement of voting rights by collective enterprises
  •  Race and gender composition measurement
  •  Reporting requirements by JSE-listed companies
This will finally put to rest the uncertainty over the legitimacy of broad-based empowerment schemes.


It is expected that current investigations relating to these ownership structures by the B-BBEE Commissioner will need to be withdrawn and re-assessed due to the Practice Note. Please contact Angie Lanham-Love, MD Lanham-Love Consulting if you require any assistance.      


LLC is perfectly positioned to ensure comprehensive B-BBEE compliance.

This means companies, B-BBEE consultants and B-BBEE Verification agents collaboratively need to change the way they operate in the B-BBEE environment. We believe we are at the forefront of this change in methodology which creates B-BBEE flexibility, excellence and ultimately “peace of mind regarding B-BBEE fronting and compliance”.