Most small businesses are subject to far less B-BBEE administration than they expect, and a substantial number need only a free sworn affidavit. The confusion costs small businesses money paid to agencies for documents they could have produced themselves.
This page sets out what a small business actually has to do, by category, and what it does not.
Business Requirements at a Glance
What a small business generally needs.
- Establish your annual total revenue to determine your category
- An Exempted Micro Enterprise is generally deemed compliant and evidences it with a sworn affidavit
- A Qualifying Small Enterprise may use an affidavit where black ownership is high enough, or requires a verified scorecard
- A start-up is generally treated as an Exempted Micro Enterprise in its first period — confirm the current rule
- The affidavit must be in the prescribed form and signed before a commissioner of oaths
- A SARS tax compliance status PIN, which most customers and tenders require alongside it
- Accurate ownership and turnover records supporting the claim
- Renewal before the validity period expires
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 The Codes and sector codes are amended, and third-party summaries go out of date quickly.
The most important thing a small business can know is that the affidavit route exists and is free. Businesses below the Exempted Micro Enterprise threshold do not need a verification agency, and the deemed level depends on black ownership. Confirm the current thresholds and deemed levels.
Do not pay for what is free. Agencies market certificates to small businesses that qualify for the affidavit route. If you are an Exempted Micro Enterprise, the affidavit is the correct document and a commissioner of oaths is available free at police stations and post offices.
Start-ups have their own treatment in their first measurement period. Confirm the current position, since it removes a compliance burden at the point a business can least afford it.
Check for a sector code. If your industry has one — construction, tourism, agriculture, information and communication technology, financial services and others — it applies instead of the generic Codes, with its own thresholds. Establish this before assuming the generic position.
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
- Certified ID copies for shareholders and directors
- Financial statements or a signed confirmation of annual total revenue
- A SARS tax compliance status PIN
- The sworn affidavit in the prescribed form, signed before a commissioner of oaths
- Records supporting any scorecard claim, where a scorecard applies
- Beneficial ownership information as filed with the CIPC
Tax, Licence and Compliance Requirements
Your B-BBEE level matters commercially. Larger customers score procurement from suppliers, and a supplier with a good level is more attractive to them. For many small businesses that is the entire reason to have the document — it opens customers rather than satisfying a regulator.
Small suppliers are often especially valuable to customers under the enterprise and supplier development elements of the Codes, and some larger businesses actively seek qualifying suppliers. That is worth knowing when approaching them.
Keep the CIPC filings current. Annual returns, director details and the beneficial ownership register all need to be up to date, and a deregistered company cannot trade at all, let alone tender.
Keep the tax compliance status PIN current, since it is checked alongside the B-BBEE document by nearly every procurement process.
Diarise the affidavit renewal against its validity period.
Ownership changes affect the level. If shareholding changes, the affidavit or certificate must reflect the current position — using an old one after a change is a misrepresentation.
Process, Deadlines and Ongoing Obligations
Work out your annual total revenue, confirm your category and whether a sector code applies, and then obtain the appropriate document.
For an Exempted Micro Enterprise: download the prescribed affidavit template, complete it accurately, sign it before a commissioner of oaths, and keep a copy to give customers.
Free help is available. The Small Enterprise Development Agency assists small businesses with B-BBEE compliance questions at no cost, including the affidavit.
Never sign an affidavit that is not true, and never enter an arrangement where a black shareholder holds a nominal interest without real economic benefit and control. Both are fronting, both are criminal, and both are investigated by the B-BBEE Commission.
- Work out your annual total revenue and confirm your category
- Use the free sworn affidavit route if you qualify for it
- Do not pay an agency for a document you can produce yourself
- Use the prescribed affidavit template
- Check whether a sector code applies to your industry
- Confirm the treatment of start-ups in the first period
- Keep CIPC filings and the tax compliance status PIN current
- Update the affidavit whenever ownership changes
- Diarise the renewal against the validity period
- Never sign an untrue affidavit or enter a fronting arrangement
Frequently Asked Questions
Do I need to pay an agency?
Not if you are an Exempted Micro Enterprise. A sworn affidavit in the prescribed form is the correct document, and a commissioner of oaths is available free at police stations and post offices.
What determines my category?
Annual total revenue against the thresholds in the Codes of Good Practice, or in the sector code where one applies to your industry. Confirm the current figures.
Why do customers ask for it?
Because procurement from suppliers with a good level scores better for them. For most small businesses the document opens customers rather than satisfying a regulator.
What if my shareholding changes?
The affidavit or certificate must reflect the current position. Using an old one after an ownership change is a misrepresentation.
Thresholds, deemed levels, affidavit forms, 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 SEDA.