SMALL BUSINESS BILL APPROVED BY NEDLAC

Issued by: National Economic Development and Labour Council

Nedlac's Executive Council has ratified the National Small Business Act, paving the way for it to be finally approved by Cabinet before being promulgated later this year.

The significance of this bill is that for the first time an institutional and regulatory framework required for the promotion of small, medium and micro-regulatory framework required for the promotion of small, medium and micro-sized enterprises (SMMEs) is created, according to Nedlac executive director Jayendra Naidoo.

"The Nedlac parties have agreed on the need to promote SMEEs as an effective way of creating jobs. This also reflects government's commitment to the promotion of black economic empowerment as the majority of SMEEs in South Africa are owned by black people," Naidoo said.

Business, labour and government delegates to Nedlac have endorsed the general policy direction taken by the bill.

However, there were a few reservations expressed about the implementation of certain aspects of the Bill and it was agreed that individual organisations would raise their concerns with the Parliamentary Portfolio Committee," Naidoo says.

"There was extensive consultation and organisations represented at Nedlac were independently invited to participate in these processes," he said. "The final version of the draft bill was developed by a core team of representatives convened by the Nedlac secretariat."

The Bill

• Sets standards which define SMEEs. SMMEs will be required to comply with any two of three criteria relating to total annual turnover, total asset value and total number of full-time employees to qualify for support (see schedule attached);
• Establishes the National Small Business Council to represent and promote the interests of SMMEs at all levels of government and to advise government on economic policy affecting SMEEs;
• Establishes the Ntsika Enterprise Promotion Agency to expand and co-ordinate the provision of non-financial support to SMEEs (for example, sharing of information, advice and training);
• Creates an overall regulatory framework which defines the parameter os the relationships between small-business functions in all three tiers of government. It also allows for guidelines to be drawn up to assist government structures in promoting the national small business support strategy.

SCHEDULE

The enterprise must comply with any TWO of the three criteria listed below.

Sector Size Total Total asset Total number annual value of full-time turnover (immovable employees property excluded) ------------------------------------------------------------------- Less than Less than ------------------------------------------------------------------- Group A

Agriculture, Manufacturing, Medium R15.0m R3.0m 151-300 Forestry, Fishing, Transport Storage, Communication, Financing, Insurance, Real Small R2.5m R0.5m 16-150 estate, Business services. Community of Social or Personal services, and services other than those specified in item B: Micro R0.15m R0.1m 1-15 ------------------------------------------------------------------- Group B

Mining, Quarrying, Medium R25.0m R5.0m 76-150 Electricity, Gas, Water, Construction, Wholesale trade, Small R5.0m R1.0m 9-75 Retail trade, Catering, Accomodation services, and any manufacturing or trading activity not specified in item A: Micro R1.25m R0.25m 1-8 -------------------------------------------------------------------