QTC specialises in Ownership. Our in-depth understanding of Ownership, and its application, in terms of the Codes transforms your empowerment into a competitive advantage. Ownership is core to our business. It is a deeply focused speciality that we are able to deliver to our clients.
Black Ownership is the cornerstone of B-BBEE. Your choice of empowerment partner has a dramatic impact on your Ownership score.
How does this work in practice?
Participants in B-BBEE Ownership are broken down into subcategories within the Ownership Scorecard. Points are awarded for ownership by Black people, Black women, New Entrants, and members of a Designated Group. Ownership points are awarded according to the proportion of the target achieved, so achieving 50% of the target achieves 50% of the available points. There are two calculation principals that can be applied in calculating B-BBEE Ownership, the Flow Through Principal (FTP) and the Modified Flow Through Principal (MFTP). We will illustrate both.
1% of equity in the hands of a Black person delivers 0.32 of a point. 1% in the hands of a Black person who is classified as a Black woman delivers 0.72 points. If that Black woman is also a New Entrant and a member of a Designated Group, she will deliver 2.72 points. Selecting a Black person who falls into all four categories will deliver 8.5 times more points than a partner who is simply a Black person.
Choosing the right empowerment partner to hold 10% of the equity in your company can make a difference of 240% (and save you from being discounted an empowerment level). 10% of equity in the hands of Black people delivers 6.4 Ownership points. 10% held by a Black woman who is a New Entrant and a member of a Designated Group delivers 15.4 points. Selecting Black people who fall into all four categories will deliver 2.4 times more points than partners who are simply Black people.
MFTP can almost double the points recognised for Black Ownership so long as the empowerment partner holds an Economic Interest of at least 51%. MFTP only applies to Generic Enterprises (turning over more than R50m per year). This benefit does not apply to the other sub elements of Ownership. Using MFTP, a 5.1% equity stake would deliver the same 6.4 Ownership points as 10% Black Ownership does in Infographic 2. The remaining elements will not be affected, so 5.1% will deliver 13.44 points.
Click on the drop down to discover how to do ownership right.Contact QTC
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