Quote Originally Posted by Duncan View Post
My question is would that be legal and solve my ownership problem
There's nothing illegal about selling an equity share to a manager and structuring the sale as a loan agreement that the new partner settles over time. However, it is only going to solve your "ownership problem" if the equity share is fairly substantial. To earn maximum ownership points on the new B-BBEE scorecard (which becomes mandatory from May), you would need at least 25% black ownership (EMEs can automatically qualify for level 2 B-BBEE status, but then the black ownership portion would need to be at least 51%). Selling a quarter (or more) of your business to a middle manager is fraught with risk, and bear in mind that employee share programs are subject to multiple criteria.

If a black partner is absolutely non-negotiable, you could also consider a joint equity exchange: approach a black-owned business client / supplier / industry partner / etc. and offer them a stake in your business in exchange for a stake in theirs. Obviously it's not without risks and complications, but at least you know that you are getting something immediate and substantial in exchange while broadening your investment portfolio.