New thresholds and B-BBEE Status Levels for EMEs and QSEs

The Amended Codes of Good Practice have been issued under section 9 of the B-BBEE Act
(Act No 53 of 2003, as amended) per Notice 1019, Gazette No 36928 of 11 October 2013 as
amended by Notice 407, Gazette No 38765 of 6 May 2015 (the amended codes). The
amended codes came into effect on 1 May 2015 in accordance with Notice 444, Gazette No
38799 of 15 May 2015.

Under the amended codes, the annual total revenue threshold for Exempt Micro Enterprises
(EMEs) has increased from R5 million to R10 million, and a Qualifying Small Enterprise (QSE)
qualifies within the R10-R50 million bracket.

EMEs (including start-ups) and QSEs could qualify for higher B-BBEE Status Levels, depending
on their black ownership:

  • An EME or QSE with 100% black ownership qualifies at a Level One.
  • An EME or QSE with more than 51% black ownership qualifies at a Level Two.
  • If black ownership of an EME is below 51%, it qualifies at a Level Four.
  • If black ownership of a QSE is below 51%, it is required to be measured in terms of the QSE
    scorecard to confirm its B-BBEE Status Level.

It should be noted that an entity tendering for work which will take them into the next size
measurement category will require a B-BBEE certificate rated on that size entity. For example,
if an EME were to tender for a contract worth R12million, it would be required to submit a
QSE scorecard.

1.1 Sworn affidavits
A meaningful change for EMEs is the removal of the requirement to obtain a B-BBEE
verification certificate to confirm its B-BBEE status level (as well as for QSEs in certain
circumstances). The amended codes make provision for confirmation of an EME’s B-BBEE
status level via a sworn affidavit confirming the entity’s annual total revenue and black
ownership (Par. 4.5 of the mended Code Series 000 Gazette No 36928 as amended by Gazette
No 38765).

A sample of an affidavit for an EME can be found on the DTI’s website:

The CIPC has also been granted authority to issue certificates to EMEs, but only on initial
registration of a start-up entity, i.e. the status that applies to an enterprise for the first year
following its formation or incorporation (section 6, Start-up enterprises in the Amended Code
Series 000 Gazette No 36928).

Sworn affidavits are also applicable to QSEs with a black ownership of at least 51%.

Sworn affidavits can only be issued by a Commissioner of Oaths, so we can do that for you.

The application of the amended codes and the basis for measurement are provided in
Statement 000 of the Amended Code Series 000 Gazette No 36928 as amended by Gazette
No 38765, and can be summarised as follows:

Note: BBBEE Certificates – we may no longer issue these certificates. However, we can prepare & issue
the sworn affidavits for you. Speak to us.

This document does not constitute professional advice and must not be relied on for any purpose. It is
merely a summary of important changes to the related Acts.