Transaction

2018-06-13 06:01
Chiara Claassens

Chiara Claassens

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Question:

I have a medium-sized construction business. We recently had our BEE partner buy a stake in our business.

I have heard that you are now required to register your BEE transactions with the new B-BBEE Commission.

Is this correct and will I have to register our transaction?

Answer:

You are correct in that the B-BBEE Commission does require what is termed a “Major BEE Transaction” to be registered with it.

Your first step would therefore be to determine whether your BEE transaction falls within the scope of a Major BEE Transaction.

In accordance with Notice 551 in Government Gazette No 40898, a Major B-BBEE Transaction refers to any transaction between entities or parties that results in Ownership Recognition in terms of the Code Series 100, Statement 100 of the Amended BEE Codes of Good Practice, and the value of which equals or exceeds R25 million.

The threshold is based on the value of the transaction excluding administration fees, professional fees and legal fees, which means that only the value of the sale of the asset or business or equity instrument is taken into account.

If your transaction value was potentially above this threshold it may need to be registered.

As of 9 June 2017, all Major B-BBEE Transactions must be registered with the B-BBEE Commission, within 15 days of concluding the B-BBEE transaction.

Registration occurs by submitting the prescribed form B-BBEE 18 and supporting documentation to the B-BBEE Commission.

The form can be found on the B-BBEE Commission website at https://bbbeecommission.co.za.

It is important to note that in respect of Major B-BBEE Transactions concluded between 24 October 2014 and 8 June 2017, the registration requirement is retrospective in that B-BBEE transactions must have been registered with the B-BBEE Commission within 60 calendar days from 9 June 2017.

The purpose of registering a Major B-BBEE Transaction is to allow for the monitoring of compliance, levels of transformation, and the extent to which the benefits of transaction flow to black persons that are part of these deals.

If you are unsure as to whether your transaction should have been registered or how to go about registering the transaction, we would advise you to obtain the assistance of an attorney or BEE specialist to help you.
– Chiara Claassens, candidate attorney, Phatshoane Henney Attorneys

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