Most small businesses need very little B-BBEE paperwork. An enterprise with annual total revenue of R10 million or less is an Exempted Micro Enterprise (EME) and only has to obtain a sworn affidavit or a CIPC certificate each year. A Qualifying Small Enterprise (QSE), with revenue between R10 million and R50 million, may also use an affidavit if it is at least 51% black owned. Otherwise it is measured on the QSE scorecard. These are the thresholds in Statement 000 of the Codes of Good Practice (2019).
An EME is deemed Level 4 by default. It moves up to Level 2 if it is at least 51% black owned, and to Level 1 if it is 100% black owned. Read this alongside our guide to business and compliance requirements.
Business Requirements at a Glance
- EME: annual total revenue of R10 million or less; deemed Level 4 (100% recognition), Level 2 (125%) at 51% or more black ownership, Level 1 (135%) at 100%
- QSE: annual total revenue between R10 million and R50 million
- Large enterprise: R50 million or more, measured on the full generic scorecard
- EME evidence: a sworn affidavit or a CIPC certificate, obtained every year
- QSE evidence: an affidavit if at least 51% black owned; otherwise a QSE scorecard
- A start-up is ordinarily treated as an EME, with exceptions when tendering (see below)
Registration and Legal Requirements
B-BBEE is governed by the Broad-Based Black Economic Empowerment Act 53 of 2003, as amended by Act 46 of 2013, and the Codes of Good Practice. The B-BBEE Commission oversees implementation and investigates violations; the Department of Trade, Industry and Competition (dtic) issues the Codes and the affidavit templates.
Check for a sector code first. An entity in a sector with a gazetted sector code is measured only under that code, so confirm with the dtic whether one applies to your industry before assuming the generic position.
Start-ups. A start-up is ordinarily treated as an EME. The exception is tendering: a start-up must submit a QSE scorecard for contracts above R10 million and below R50 million, and the generic scorecard at R50 million or more. The Commission defines a start-up as an entity that has operated for less than one year, not a continuation of an existing enterprise.
Do not split a business to qualify. Splitting or dividing an entity to qualify as an EME, QSE or start-up may be an offence, and knowingly misrepresenting your B-BBEE status is an offence under section 13O of the Act. The Commission can fine an entity up to 10% of annual turnover and individuals face up to 10 years’ imprisonment (Commission Practice Guide 01 of 2022).
Documents and Ownership Information Required
- Proof of annual total revenue, such as annual financial statements
- Ownership details: the percentage of black ownership and black woman ownership
- CIPC registration documents and shareholder or member details
- The dtic sworn affidavit template for your category: EME template or QSE (general) template
- A commissioner of oaths to commission the affidavit
The dtic templates are free to download and qualifying entities must use them; they may be placed on your letterhead. The EME template declares black ownership, black woman ownership, income not exceeding R10,000,000 and the level, and states a 12-month validity. The QSE template covers revenue between R10 million and R50 million and offers only Level 1 (100% black owned) or Level 2 (at least 51% black owned).
The commissioner of oaths must not have an interest in the enterprise, so an employee cannot commission it, and anyone qualifying under the Justices of the Peace and Commissioners of Oaths Act can. Signature dates must be the same. Confirm with the commissioner whether any fee applies.
Tax, Licence and Compliance Requirements
B-BBEE is not a licence, but customers and tender processes often ask for the document alongside proof of tax compliance and CIPC standing, so keep those current too.
The free CIPC route. CIPC issues B-BBEE certificates to EMEs at no charge, valid for 12 months. Conditions include turnover under R10 million, a company or close corporation with In Business status, annual returns up to date, and an applicant who is a director or member. Entities with foreign directors or members cannot use the CIPC service and should use the dtic affidavit instead. Start at the CIPC B-BBEE page.
QSEs below 51% black ownership are measured on the QSE scorecard. The Commission states these must be verified by an accredited verification professional, as must large enterprises. A verification certificate can only be issued by an agency accredited by SANAS. Check an agency’s accreditation status, period and scope on the SANAS website before paying (Practice Guide 01 of 2022, paragraph 27). Agency fees are not published by an official source, so compare quotes.
Priority elements. On a scorecard, a QSE must comply with Ownership plus either Skills Development or Enterprise and Supplier Development. Missing a sub-minimum on a priority element discounts the level by one. Black-owned QSEs that use the affidavit route are excluded from this.
Process, Deadlines and Ongoing Obligations
- Work out your annual total revenue and confirm whether you are an EME, QSE or large enterprise
- Check whether a sector code applies to your industry
- EME: choose the free CIPC certificate (if you are eligible) or complete the dtic affidavit
- QSE at least 51% black owned: complete the dtic QSE affidavit
- Other QSEs: engage a SANAS-accredited agency for a scorecard verification
- Have the affidavit commissioned, and keep a copy for customers
- Renew every year
A sworn affidavit is valid for 12 months from the date it was commissioned. For example, one commissioned on 12 August 2022 expires on 11 August 2023. A CIPC certificate is also valid for 12 months. Diarise renewal, and replace the document if your ownership or revenue band changes. See the Commission FAQ for further detail on affidavits.
Frequently Asked Questions
What are the B-BBEE requirements for a small business?
It depends on revenue. At R10 million or less you are an EME and need only a yearly affidavit or CIPC certificate. Between R10 million and R50 million you are a QSE and need an affidavit if at least 51% black owned, or a verified QSE scorecard if not.
Do I need to pay a verification agency?
Not as an EME, and not as a QSE that is at least 51% black owned, since an affidavit is enough. A QSE with lower black ownership, or a large enterprise, needs verification by a SANAS-accredited agency.
What level is my small business?
An EME is deemed Level 4. At 51% or more black ownership it is Level 2, and at 100% it is Level 1. A QSE that is at least 51% black owned is Level 2 and one that is 100% black owned is Level 1. Other QSEs get their level from the scorecard.
How long is a B-BBEE affidavit valid?
12 months from the date it was commissioned.
Where do I get the affidavit template?
Download the EME or QSE template from the dtic website, using the links above. We do not host the forms.
Is a new business treated differently?
Usually, yes: a start-up is ordinarily treated as an EME. It must submit a QSE scorecard for tenders above R10 million and below R50 million, and the generic scorecard from R50 million.
Can I use an old affidavit after my shareholding changes?
No. The document must reflect your current position, and misrepresenting your status is an offence.
Thresholds, ownership rules and affidavit forms are set by the dtic and the B-BBEE Commission and can be amended, so confirm with them before you rely on this guide. See business and compliance requirements and, for the next step, company registration requirements.