How to Qualify For BEE (B-BBEE)
There are four steps you’ll need to take to ensure you qualify for BEE (B-BBEE), including:
Step 1 – Select Your Company’s Annual Turnover
The size of your business is significant in determining the required levels of BEE (B-BBEE) compliance. The Codes provide for three levels of compliance based on the size of your business:
Exempted Micro Enterprises (EMEs), which are businesses with an annual turnover of less than R10 million. This is a new amendment, EMEs were previously businesses with an annual turnover of less than R300 000 and less than five staff members.
Qualifying Small Enterprises (QSEs), which are businesses with an annual turnover between R10 to R50 million.
Medium to large enterprises (M&Ls), are businesses with an annual turnover of more than R50 million.
Step 2 – Match the Turnover to the Scorecard
EMEs are exempt. However, these businesses will automatically receive a level associated with its percentage of black ownership, such as:
Black ownership | BEE (B-BBEE) Status Level | Procurement Recognition |
100% Black Owned EME | Level 1 | 135% |
>50% Black Owned EME | Level 2 | 125% |
<50% Black Owned EME | Level 4 | 100% |
The annual turnover must be verified by an accredited accountant, auditor or rating agency.
QSE’s used to be able to choose four out of the seven BEE Scorecard elements to score their points. However, from 2014, QSEs must comply with all 5 elements of the revised BEE (B-BBEE) Scorecard to score their points.
M&L must comply with all 5 elements of the revised BEE (B-BBEE) Scorecard to score their points.
Step 3 – Determine the Number of Pillars Required For Your Scorecard
The five pillars of B-BBEE are:
- Ownership (Direct empowerment)
- Management Control (Indirect empowerment)
- Skills Development
- Enterprise Development
- Socio-Economic Development.
Step 4 – Select the Pillars For Your Scorecard
Each of the pillars is worth a certain ‘weight’ in its contribution to B-BBEE compliance. The pillars contribute to overall compliance as follows:
- Ownership 25%
- Management 19%
- Skills Development 20%
- Enterprise Development 40%
- Socio-Economic Development 5%.
Ownership, skills development and enterprise development are now considered priority pillars and a minimum of 40% compliance is mandatory, in order to achieve level 1 B-BBEE.