THE EVOLUTION OF OWNERSHIP

For years, many South African businesses have viewed B-BBEE Ownership as a box-ticking exercise. If you had a Trust Deed and a set of minutes, you had your points. But as we look toward the implementation of the Draft Series 600 in 2026, that era of "paper compliance" is officially ending. The focus has shifted from the mere existence of a Trust to the forensic scrutiny of its intent.

Recent data from the B-BBEE Commission suggests a startling reality: nearly 80% of current ownership trusts are at risk of failing verification under the new criteria. This isn't because the points have moved—they still sit at a critical 25 points on the scorecard—but because the "rules of engagement" for how a Trust is governed have been entirely rewritten.

The "But For" Reality Check

The most significant hurdle in the new draft is Clause 1.3, the "But For" test. It poses a single, uncomfortable question to every Board: Would this Trust exist and be funded if B-BBEE requirements were removed tomorrow?

If the answer is "No," the Trust is increasingly viewed by the Commission as a fronting risk. To survive this shift, your Trust must demonstrate a "Legitimate Commercial Reason" (Clause 1.2). This means moving away from vague philanthropic goals and toward documented business strategies—such as workforce pipeline development or long term community sustainability—that justify the Trust’s existence independent of a scorecard.

From Control to Independence

The Draft Series 600 also takes a firm stand on Founder control. The days of a company founder appointing the majority of trustees, holding veto powers over distributions, or having the unilateral power to remove trustees are numbered.

The new mandate is clear: Independence is the only defense against disqualification. * Founders are limited to a single trustee appointment.

• Trustees "shall approve" qualifying claims, removing the discretionary "loophole" where funds could be withheld indefinitely.

• Economic interest must flow naturally and transparently to beneficiaries.

The Cost of Inaction vs. The Value of Protection

The difference between a "Fixed Trust" and a "Typical 2013 Trust" is often the difference between a Level 2 and a Level 4 (or worse, a non-compliant status). For many of our clients, that gap represents millions in potential government contracts and the avoidance of significant B-BBEE penalties.

Ensuring your Trust is bulletproof is no longer a legal luxury; it is a business continuity requirement. A forensic Deed Review is the first step in moving from a position of vulnerability to one of protected, sustainable compliance. We aren't just looking for points anymore; we are looking for a structure that can withstand the highest level of audit rigor.

Is your Trust Deed a strategic asset that supports your business growth, or is it a ticking compliance clock waiting for 2026?

Compliance Hub | Strategic Support

We provide a comprehensive 7 day Forensic Deed Audit and Amendment process to align your structures with Clause 1.2 and 1.3 requirements. We ensure that your "But For" rationale is documented, notarised, and ready for Commission scrutiny.