Frequently Asked Questions

Africans, Coloureds, Indian or Chinese persons who are South African citizens by birth or by descent or who were naturalised prior to the commencement of the interim constitution in 1993, or was naturalised after the commencement date of the constitution of the Republic of south Africa Act of 1993, but who, without the Apartheid policy would have qualified for naturalisation before then.

A concept in the Amended BBBEE Codes of Good Practice, this term refers to the ability of a company to meet the following requirements, and is listed on the Verification Certificate. This is a critical aspect as non-empowering suppliers cannot be counted under their client’s BEE procurement calculation.

  • BEE compliant i.e at least Level 8 or better on the B-BBEE scorecard
  • Meet the regulatory obligations of the Employment Equity Act, Skills Development Act and Skills Development Leviable Act.
  • A QSE company needs to meet 1, and a Generic company any 3, of the various criteria incorporating employment of black people and local South Africans, local value-added production and supporting local suppliers, skills upliftment of black entrepreneurs and others based on Sector Codes.

These are individuals who have a long-term or recurring physical or mental impairment which substantially limits theirs prospects of entry into, or advancement in employment.

  • <R10 million annual turnover or start-up company – Exempt Micro Enterprise (EME)
  • R10 – 50 million annual turnover – Qualifying Small Enterprise (QSE)
  • >R50 million annual turnover – Large Enterprise, assessed on the Generic Scorecard

 

Kindly note that these turnover bands vary in the Industry Sector Codes, so refer to the relevant Code for further detail.

An entity, mechanism or structure established to circumvent Black Economic Empowerment eg. creation of an entity which has no capability (staff or assets) merely to provide a good BEE level, use of non-executive directorship as “hollow” appointments purely for compliance purposes, splitting a company into smaller entities to fall into EME or QSE categories, and so forth.

Fronting is now a criminal offence with harsh penalties.  It can be reported to the BEE Commission for investigation and further action.

Enterprises qualifying as EME’s are granted an automatic recognition level regardless of their contribution to BEE. Automatic recognition grants the entity a favourable BEE status without the need for contribution and solely on an affidavit confirming annual turnover below R10 million (or in first year of incorporation) and black ownership status, viz:

  • Level 1 for 100% black-owned
  • Level 2 for ≥51% but < 100% black-owned
  • Level 4 for <51% black-owned.

There are various Industry Sector Codes that are either already finalised or in process – see our Sector Code page (link) for an up-to-date summary of the various Codes.  These Sector Codes have been formulated through an in-depth process by a committee of industry representatives to customise the general DTI Codes for the specific needs or challenges of major industry sectors.

BEE verification agencies ensure that companies are rated on the correct Code once they embark on the verification process, which ultimately is listed on the certificate.  It is best to either read the definition of the Sector Code (Downloads) or contact us to clarify which one pertains to you

A B-BBEE certificate is valid for 12 months from date of issue.  Should any changes to the following elements arise thereafter, the certificate can be updated during the year by means of a re-evaluation of specific elements only.  The revised certificate then has a new revision number and issue date, however the expiry date will always remain the same.

  • Ownership and Management Control – assessed at time of on-site assessment.
  • Skills Development, Enterprise & Supplier Development, Socio-economic Development – assessed in the same financial period used for original certificate.