What B-BBEE requires of your business depends almost entirely on its turnover. The framework treats very small businesses, small businesses and larger ones quite differently, and the first step is establishing which category you fall into.
That single answer determines whether you need a full verification and a scorecard, or a sworn affidavit that costs nothing.
Business Requirements at a Glance
What B-BBEE compliance generally involves.
- Establishing your annual total revenue, which determines the category you fall into
- For the smallest category — an Exempted Micro Enterprise — a sworn affidavit rather than a verification
- For the middle category — a Qualifying Small Enterprise — an affidavit where black ownership is high enough, or a verified scorecard
- For larger entities — a full verified scorecard across all the elements
- A B-BBEE certificate or sworn affidavit valid for the prescribed period
- Verification by a SANAS-accredited agency, where verification is required
- Compliance with any sector code that applies to your industry
- Accurate records supporting every claim made
Registration and Legal Requirements
B-BBEE is governed by the Broad-Based Black Economic Empowerment Act 53 of 2003 and the Codes of Good Practice issued under it, together with sector codes where a sector code applies. The B-BBEE Commission oversees compliance and the Department of Trade, Industry and Competition administers the framework.
Confirm the current thresholds, scorecard weightings and requirements with the Department of Trade, Industry and Competition, the B-BBEE Commission or a SANAS-accredited verification agency. The Codes and sector codes are amended, and third-party summaries go out of date quickly.
Start by establishing your category. Annual total revenue determines whether you are an Exempted Micro Enterprise, a Qualifying Small Enterprise or a large entity, and the obligations differ substantially. Confirm the current turnover thresholds — they are set in the Codes and revised.
The smallest businesses do not need a verification. An Exempted Micro Enterprise is generally deemed compliant at a level determined by its black ownership, evidenced by a sworn affidavit in the prescribed form. That affidavit costs nothing beyond a commissioner of oaths.
Sector codes override the generic Codes where one applies to your industry — construction, tourism, agriculture, information and communication technology, financial services and others have their own. Establish whether a sector code applies to you before doing anything, because the thresholds and weightings differ.
The scorecard has several elements — broadly ownership, management control, skills development, enterprise and supplier development, and socio-economic development — with weightings set in the Codes. Some elements carry priority status with sub-minimum requirements, and missing a sub-minimum reduces the overall level.
Fronting is a criminal offence. Misrepresenting ownership, control or participation to obtain or improve a B-BBEE status is prohibited under the B-BBEE Act, and it carries serious consequences for everyone involved — the entity, its directors and the person whose participation is misrepresented. Arrangements where a black shareholder holds a nominal interest without real economic benefit or control are exactly what the Act targets.
Documents and Ownership Information Required
What is generally required.
- CIPC registration documents and a current company profile
- A shareholders’ or members’ register with identity details
- Beneficial ownership information as filed with the CIPC
- Certified ID copies for directors, members and shareholders
- Annual financial statements or, for a small entity, a signed turnover confirmation
- A SARS tax compliance status PIN
- Payroll records and employment equity data, where the scorecard requires them
- Records of skills development, procurement and enterprise development spend, where applicable
Tax, Licence and Compliance Requirements
A sworn affidavit is a legal document. It must be in the prescribed form, signed before a commissioner of oaths, and the contents must be true. A false affidavit is a criminal matter and it is also fronting.
Use a SANAS-accredited verification agency where verification is required. A certificate from an unaccredited agency is worthless and customers check. The list of accredited agencies is published by SANAS.
Certificates and affidavits have a validity period. Confirm the current period and diarise the renewal, because an expired certificate can cost a contract at the moment it is checked.
Your B-BBEE status affects your customers. Procurement from a supplier with a good level scores better for the customer, which is why customers ask. That is the practical commercial driver behind the whole framework for most small businesses.
Improving the level takes planning. Skills development spend, enterprise and supplier development, and procurement decisions all take a financial year to reflect. Deciding to improve a level three months before a tender does not work.
Keep the supporting records for every claim, for the period required. Verification agencies test claims against documents, and a claim without evidence is not counted.
Process, Deadlines and Ongoing Obligations
Establish your category first by working out annual total revenue, then confirm whether a sector code applies. Those two answers determine everything else.
If you are an Exempted Micro Enterprise, obtain the sworn affidavit in the prescribed form and keep it current. If you are larger, engage a SANAS-accredited verification agency in good time before the certificate is needed.
Free support is available. The Small Enterprise Development Agency assists small businesses with compliance questions at no cost.
Beware of anyone selling a certificate. A B-BBEE certificate is issued after verification by an accredited agency, or is a sworn affidavit you make yourself. Anyone selling a certificate, or offering to improve a level through a paper arrangement, is offering fronting.
- Work out your annual total revenue and establish your category
- Check whether a sector code applies to your industry
- Use a sworn affidavit if you are an Exempted Micro Enterprise
- Use only a SANAS-accredited verification agency
- Confirm the validity period and diarise the renewal
- Keep supporting records for every claim made
- Plan improvements a financial year ahead, not weeks
- Never misrepresent ownership or control — fronting is criminal
- Never buy a certificate or a paper arrangement
- Use free SEDA support for compliance questions
Frequently Asked Questions
Does every business need a verification?
No. The smallest businesses — Exempted Micro Enterprises — are generally deemed compliant and evidence it with a sworn affidavit rather than a verification. Establish your category first.
What determines my category?
Annual total revenue, against thresholds set in the Codes of Good Practice. Confirm the current thresholds, and check whether a sector code applies to your industry.
Can I buy a certificate?
No. A certificate is issued after verification by a SANAS-accredited agency, or is a sworn affidavit you make yourself. Anyone selling one is offering fronting, which is a criminal offence.
How do I improve my level?
Through decisions that take a financial year to reflect — skills development, enterprise and supplier development, and procurement. Planning three months before a tender does not work.
Thresholds, scorecard elements, weightings, sector codes and validity periods are set in the B-BBEE Act and the Codes of Good Practice and are amended. Confirm current requirements with the Department of Trade, Industry and Competition, the B-BBEE Commission or a SANAS-accredited agency.