Increase your B-BBEE score through a joint venture

By Sakhi Siba.

A Joint Venture (JV) is a business agreement between two or more entities whereby they agree to join their resources for the purpose to achieve a specific business goal. A JV is its own entity, separate and apart from the participants to the agreement. It will require its own Broad-Based Black Economic Empowerment (B-BBEE) certificate when responding to tenders and entering into contracts that require a B-BBEE certificate.

This means you will have to obtain a new B-BBEE certificate for the Joint Venture, which combines each participant’s B-BBEE status level.

The following documents will be required to do a rating of the JV:

• Level 1: 100% Black Owned Exempted Micro Enterprise (EME) or Qualifying Small Enterprise (QSE) = 100 points;

• Level 2: 51% Black Owned EME or QSE = 95 points;

• Level 4: Less than 51% Black Owned EME = 85 points;

• Generic Enterprises and QSE’s which are less than 51% Black Owned = Current score on B-BBEE certificate.
  

This scoring indirectly allows Generic Enterprises and QSE’s, which have less than 51% Black Ownership, to use the score on their current B-BBEE certificates for purposes of tendering under an unincorporated JV. The JV B-BBEE certificate must tender specific; it must contain the name and number of the tender that you are responding to. A JV B-BBEE certificate is valid for 12 months and only applicable to a specific project.

JV’s are, therefore, a great way to increase B-BBEE scores by joining forces with BlackOwned companies and increasing your ownership. When you have the right JV partner with a good B-BBEE score it will ensure that you achieve a much higher score, on the Preferential Procurement element rather than going into the tender alone.

Contact your nearest SEESA office to find out how we can assist you in obtaining a Joint Venture B-BBEE certificate for your entity and help you increase your B-BBEE scores.

Article written by Lezé Jonker (BEE and Labour Legal Advisor at SEESA Port Elizabeth)