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available under the Procurement element.
• The current separate sub-categories for EMEs and QSEs under the
Procurement element are to be merged into a single sub-category BEE
with a target of 25% of the total measured procurement expenditure
for this combined category. Additionally, in a further nod towards 51%
black owned suppliers, these amendments propose to allow suppliers
that have 51% black ownership measured using the flow-through
principle, to also be recognised for expenditure under this combined
sub-category.
• It is further proposed that companies can multiply their expenditure
on suppliers that are at least 51% black owned, measured using
the flow-through principle, by a factor of 2, enhancing the attractiveness
of procuring from such companies.
Aside from the above procurement benefits, any entity which is at least 51%
black owned, measured using the flow-through principle, can also qualify as a
beneficiary for Supplier Development or Enterprise Development contributions.
Currently, only EMEs or QSEs (companies with a turnover of less than R50
million) qualify as beneficiaries. The proposed amendments wish to extend
this by allowing all 51% black owned companies, measured using the flow-
through principle, to qualify as beneficiaries, irrespective of turnover, thereby
also including Generic companies (more than R50 million annual turnover)
as potential beneficiaries and positioning such companies to benefit from
investment or support through supplier or enterprise development agreements
concluded with business partners wishing to claim points under their Enterprise
and Supplier Development elements.

Importantly, the proposed amendments will only apply to entities that are
measured under BEE Codes. If your business falls under a specific sector charter
such as the ICT or Construction Sector BEE Charter, these amendments will not
automatically apply until these sector charters have been aligned with the
proposed amendments.
What is clear from the above is that from a transformation and BEE Scorecard
perspective there is a clear and definite advantage to being a 51% black owned
company. There are specific requirements to qualify as such a company, and
if you want to ensure that you qualify as a 51% black owned company using
the flow-through principle to access the additional benefits described above,
it would be advisable to consult with a BEE or commercial specialist before
you proceed with your transaction to ensure that your transaction is structured
correctly and your business is positioned favourably to make the most of the
strategic opportunities afforded to 51% black owned companies.

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