B-BBEE and Silent Partners
B-BBEE and Silent Partners
Broad-Based Black Economic Empowerment (B-BBEE) rules around silent partners are not explicitly defined. However, the B-BBEE Act and the Codes of Good Practice provide a framework for B-BBEE ownership through 'discretionary collective enterprises'. These include broad-based black ownership schemes (BBOSs), employee share ownership schemes (ESOPs), trade unions, not-for-profit companies, co-operatives, and trusts.
The B-BBEE Commission has expressed views on what is required for 'Black' people (as defined) to be recognized as holding rights of ownership for B-BBEE measurement purposes, particularly in the context of collective enterprises. For example, the Commission previously indicated that beneficiaries of an ESOP Trust can only be named individuals (not a class) and must have the right to a specific percentage of economic interest as if they were shareholders in the underlying measured entity.
However, the rules around silent partners, who typically invest capital but do not participate in the day-to-day operations or management decisions of a business, are not explicitly addressed in the B-BBEE Act or the Codes of Good Practice. It's recommended to consult with a B-BBEE consultant or legal expert to understand how silent partners might impact a company's B-BBEE status.
