BEE requirements depend on your annual total revenue. An Exempted Micro Enterprise (R10 million or less) needs a sworn affidavit or CIPC certificate. A Qualifying Small Enterprise (R10 million to R50 million) needs an affidavit if at least 51% black owned and a QSE scorecard verification otherwise. A large enterprise (R50 million or more) is verified on the full generic scorecard by a SANAS-accredited agency.
BEE is the common name for B-BBEE, the Broad-Based Black Economic Empowerment framework. Businesses dealing with organs of state, and their suppliers, are measured under it, so whether you need evidence in practice depends on who you sell to.
Business Requirements at a Glance
These thresholds come from Statement 000 of the Codes of Good Practice (2019 amendment).
- Exempted Micro Enterprise (EME): annual total revenue of R10 million or less
- Qualifying Small Enterprise (QSE): annual total revenue between R10 million and R50 million
- Large enterprise: annual total revenue of R50 million or more, measured on the full generic scorecard
- EMEs are deemed Level 4; at least 51% black owned makes an EME Level 2 and 100% makes it Level 1.
- The generic scorecard elements are Ownership, Management Control, Skills Development, Enterprise and Supplier Development, and Socio-Economic Development.
- If a gazetted sector code applies to your industry, you are measured under that code only.
Registration and Legal Requirements
The B-BBEE Commission, set up under the B-BBEE Act 53 of 2003 as amended in 2013, oversees the framework and investigates violations. Statement 000 makes entities that deal with organs of state, and their suppliers, measurable under the Codes. We found no official statement that BEE is voluntary, so do not assume it is.
Ownership, Skills Development, and Enterprise and Supplier Development are priority elements. Missing a sub-minimum discounts your level by one level. A QSE must meet Ownership plus either Skills Development or Enterprise and Supplier Development.
Documents and Ownership Information Required
For an EME or a qualifying black-owned QSE the document is a sworn affidavit on the dtic template: the EME affidavit or the QSE affidavit. Both are free. It is valid for 12 months from the date commissioned, and the commissioner of oaths must have no interest in your business.
An EME can instead get the free CIPC B-BBEE certificate, valid for 12 months, unless it has foreign directors or members. Verified entities supply the evidence their agency asks for.
Tax, Licence and Compliance Requirements
Verification certificates can only be issued by a SANAS-accredited agency. QSEs under 51% black ownership and large enterprises must be verified.
Fronting and misrepresentation are offences. Knowingly misrepresenting your status is an offence under section 13O of the B-BBEE Act, with fines of up to 10% of annual turnover for the entity and up to 10 years’ imprisonment for individuals, per the Commission’s Practice Guide 01 of 2022. Splitting an entity to qualify as an EME, QSE or start-up may also be an offence.
Process, Deadlines and Ongoing Obligations
- Work out annual total revenue and black ownership.
- Check for a sector code.
- EME or qualifying QSE: sign the dtic affidavit or get the CIPC certificate.
- Others: appoint a SANAS-accredited agency.
- Renew every 12 months.
On the verification process, the agency assesses your scorecard evidence and issues a certificate valid for 12 months. Start-ups, meaning entities in operation for less than a year (not a mere continuation of an existing business, per the Commission’s FAQ), are ordinarily treated as EMEs.
Frequently Asked Questions
Is BEE compulsory?
Statement 000 makes entities dealing with organs of state, and their suppliers, measurable under the Codes. Confirm what a given customer or tender requires.
How do I do a BEE status check?
To check a supplier’s verification certificate, confirm the agency’s accreditation status, period and scope on the SANAS website, which also lists withdrawn or suspended agencies. You can ask the issuing agency to confirm a certificate, and a CIPC certificate can be queried with the B-BBEE Commission. See the Commission’s practice guide. A sworn affidavit is valid 12 months from the date it was commissioned.
What is the BEE scorecard?
The generic scorecard measures five elements: Ownership (Code 100), Management Control (200), Skills Development (300), Enterprise and Supplier Development (400) and Socio-Economic Development (500). QSEs are measured on the QSE scorecard.
What are the BEE scorecard weightings?
In the 2013 gazette, the generic scorecard weighted Ownership 25, Management Control 15, Skills Development 20, Enterprise and Supplier Development 40 and Socio-Economic Development 5 (see the Codes). The 2019 amendment retains priority-element sub-minimums, so confirm current weightings with the dtic.
What are BEE ratings?
Your rating is your status level, from Level 1 (best) to Level 8, then non-compliant. EMEs are deemed Level 4 unless black ownership lifts them to Level 2 or Level 1. Others get a level from their scorecard points.
What is an exempted micro enterprise?
A business with annual total revenue of R10 million or less. It is deemed Level 4 and only has to obtain an annual sworn affidavit or CIPC certificate confirming revenue and black ownership.
What is fronting?
Misrepresenting B-BBEE status or black participation. It can mean splitting a business to qualify as an EME or QSE, or misstating ownership. It is an offence under the B-BBEE Act.
Do I need a verification agency?
Only if you are a QSE under 51% black ownership or a large enterprise. EMEs and qualifying QSEs can use an affidavit.
Confirm the current position with the B-BBEE Commission, the dtic or a SANAS-accredited verification agency. See company registration requirements and browse all business and compliance requirements.