Ownership is one of the five parts of the B-BBEE scorecard, worth 25 of the 109 points, and it is one of three priority elements — so getting it wrong can pull your whole B-BBEE level down. It is not one question but three: who controls the company (voting rights), who is entitled to the money (economic interest), and how much black shareholders genuinely own once you deduct the debt they took on to buy in (net value). Almost every structure that fails, fails on the third. This hub explains each of the three, sets out the lawful ways black ownership is actually done in South African practice — from a cash sale to vendor finance, employee schemes, trusts and equity equivalents — and shows you what does not work and where fronting begins. It is general information for business owners, not advice on your specific facts.
What B-BBEE ownership is
B-BBEE stands for broad-based black economic empowerment. It is a law that measures how far a business has gone in bringing black South Africans into ownership, management, skills and the supply chain — and then attaches commercial consequences to the answer. The law is the Broad-Based Black Economic Empowerment Act 53 of 2003 (as amended in 2013), and the detailed rules live in the Codes of Good Practice.
“Black people” has a specific legal meaning — Africans, Coloureds and Indians who are South African citizens by birth or descent, or who were naturalised before 27 April 1994 (or would have been entitled to be). This guide deals only with the ownership element; it does not cover management control, skills development, or enterprise and supplier development, except where they help explain how ownership fits in. And it is not tax advice — several of these structures have real tax consequences, and we say so where they bite.
There is no general law forcing you to have a B-BBEE rating. What the law does is make your rating matter commercially: every organ of state must take it into account when it buys goods and services, and your private customers earn points on their scorecards for spending with well-rated suppliers — which is why large companies push B-BBEE requirements down their supply chains. In some regulated sectors a requirement is attached to a licence. For most owners, then, the real question is whether a better rating is worth what it costs. Why ownership matters unpacks the commercial pressure and what your size means.
Three questions, not one
The single most useful thing to understand about the ownership scorecard is that it is not asking one question. It is asking three, and they are scored separately:
- Who controls the company? (6 points) — do black shareholders hold votes they can actually use?
- Who is entitled to the money? (11 points) — do black shareholders have a real claim on dividends and value?
- How much do they actually own? (8 points) — after deducting the debt they took on to buy the shares, how much is genuinely theirs?
Almost every structure that fails, fails on the third question. It is easy to hand over votes. It is easy to write “50%” on a share certificate. It is much harder to arrange things so that a black shareholder genuinely owns something, free of the debt they took on to acquire it. That is what net value measures — and it carries the minimum that can reduce your whole level.
The ownership scorecard
This is the generic ownership scorecard, as it appears in the Codes. It applies to enterprises with turnover of R50 million or more. Between them, the three questions are worth 25 points.
| Item | What is measured | Points | Target |
|---|---|---|---|
| 2.1 | Voting rights | 6 | |
| 2.1.1 | Exercisable voting rights held by black people | 4 | 25% + 1 vote |
| 2.1.2 | Exercisable voting rights held by black women | 2 | 10% |
| 2.2 | Economic interest | 11 | |
| 2.2.1 | Economic interest of black people | 4 | 25% |
| 2.2.2 | Economic interest of black women | 2 | 10% |
| 2.2.3 | Economic interest of designated groups, employee-scheme participants, broad-based beneficiaries & co-operative members | 3 | 3% |
| 2.2.4 | Black new entrants | 2 | 2% |
| 2.3 | Realisation points | 8 | |
| 2.3.1 | Net value | 8 | See the net-value line (rising target) |
| Total | 25 |
Generic scorecard (turnover R50 million or more) — Statement 100 of the Amended Codes, para 2. Each line is capped at its points: overshooting a target earns no extra. A qualifying small enterprise (R10m–R50m) uses the Statement 601 scorecard instead — still 25 points and the same measurement principles, but split differently (5/2 for votes, 5/2 for economic interest, 3 for a combined new-entrants / designated-groups line, 8 for net value).
Ownership is a priority element. That means there is a floor you must clear: you have to score at least 40% of the net-value points — 3.2 of the 8. Miss it, and your whole level drops by one. Not your ownership score — your level. A business that would have been Level 4 becomes Level 5, no matter how well it did on skills or procurement. The ownership scorecard guide works through each line.
Interactive · free · nothing leaves your browser
Score your own structure
Build your actual shareholder structure — individuals, companies, schemes and trusts, with their funding — and get the full 25-point scorecard, line by line, with the sub-minimum verdict. It reproduces the worked examples in this hub, and you can load them as starting points.
What your size means
How you are measured depends first on whether a gazetted sector code applies to your industry (if one does, you are measured under it, not the generic Codes). Subject to that, it depends on your annual turnover — and the smallest category is barely measured at all:
- Exempted Micro-Enterprise (EME) — turnover R10 million or less. You are exempt from measurement and automatically a Level 4 contributor, proven by a sworn affidavit.
- Qualifying Small Enterprise (QSE) — above R10m but below R50m. Measured on the QSE scorecard, unless you are at least 51% black-owned, in which case you may use an affidavit.
- Generic (large) enterprise — R50 million or more. Measured on the full scorecard, all priority elements apply.
For an EME or QSE, black ownership is worth a great deal: at least 51% black-owned lifts you to Level 2, and 100% to Level 1. But read the box in why ownership matters carefully first — the affidavit route uses the ordinary flow-through calculation, the strict definition of “51% Black Owned” requires you to have earned all the net-value points, and a false affidavit is a criminal offence, not a commercial risk.
The lawful ways it is done
There is no single right structure. There is a range of them, and they differ mainly in who pays, who takes the risk, and how quickly the black shareholder genuinely owns something. In brief:
- Selling shares — for cash (the cleanest on net value), or with a seller loan, notional vendor finance, or outside / preference-share funding when the buyer cannot pay cash.
- Schemes, trusts and NPCs — an employee share scheme, a broad-based or community scheme, a trust or a non-profit company holding shares for a group of black beneficiaries.
- Selling a business or an equity equivalent — when you will not sell shares in your company at all.
Not sure where to start? The structure selector walks you from your position to a sensible starting point, and choosing a structure sets out the questions to answer before anyone draws anything.
What does not work
The scorecard was designed to measure exactly what black ownership costs you — so you cannot score by giving away the label without the substance. A share with no vote does not earn the voting points; a share with no dividend right does not earn the economic-interest points; a share bought entirely with debt that never reduces does not earn the net-value points. That is why a bare share option, a phantom share or a profit share scores nothing on ownership.
Push a paper structure too far and you cross into fronting — a criminal offence that is wider than most owners expect, and one you can commit without lying to anyone. Fronting and the law sets out the definition, the penalties, what the courts have done, and the warning signs. And the myths page corrects eight things you may have been told that are simply not right.
Before you sign anything
Every business is different, and the right structure depends on facts this guide does not know — your turnover, your customers, your funding, your black partner and what you are trying to achieve. Get the sequence right: establish which code applies and the level you need; decide what you are willing to give up before anyone drafts; model the net-value line for years one to ten; check the tax; take independent advice on the actual documents; and, after closing, hold the meetings, make the distributions and re-run the model every year.
Broad-Based Black Economic Empowerment Act 53 of 2003, as amended by the Broad-Based Black Economic Empowerment Amendment Act 46 of 2013 — the statute behind the scorecard, the fronting offence and the Codes of Good Practice.
Nothing in this hub is advice about your business, and reading it does not create a lawyer-client relationship. The law is stated as at 25 July 2026 and B-BBEE rules change — a set of draft amendments was published for comment in January 2026 but had not been finalised when this hub was written. Before you implement anything described here, get advice on your own facts.