Understanding Black Economic Empowerment in Three Easy Steps

07 Dec Understanding Black Economic Empowerment in Three Easy Steps

One need only look at the collection of acts introduced by the British colonial and Apartheid governments to see why the Broad-Based Black Economic Empowerment (B-BBEE) Act was passed by parliament in 2003 and signed into law by then president, Thabo Mbeki, in 2004 – giving previously disadvantaged people equal opportunity to meaningfully contribution to the South African economy. Here is BEE in a nutshell…

What is BEE?

In essence, the objective of the B-BBEE Act is to rectify past inequalities by transforming economic practises to ensure black ownership, management and participation in the economic growth of South Africa. The B-BBEE Codes of Good Practice provide structures for the BEE scorecard which allows customers to claim BEE points for buying from your organisation. The higher your BEE status level, the more chance of getting business from clients who see BEE status as an important criterion when deciding on who to buy from.

Who Needs to Comply?

Any business looking to benefit from the Act can register on a BEE database and receive a score. The B-BBEE Act distinguishes between three main types of organisations:

  • Exempt Micro Enterprise (EME)
    This is a company with a turnover of less than R10 million per year. It is automatically deemed a Level 4 contributor once registered on a BEE database, but can be elevated to Level 2 if 51% black owned, and Level 1 if 100% black owned. Affidavits of turnover and ownership are required upon registration.
  • Qualifying Small Enterprise (QSE)
    A QSE is a company with a yearly turnover of between R10 million and R50 million. Compulsory BEE criteria include having a person of colour in the process of purchasing at least 10% of the business, and a skills development program for persons of colour within the organisation.
  • Generic Enterprise
    An organisation with a yearly turnover exceeding R50 million is known as a generic enterprise. It is scored on all five BEE criteria, namely ownership, management control, skills development, enterprise & supplier development, and socio-economic development.

Becoming BEE certified is a gateway to vast business opportunities and capabilities in the South African marketplace. Not only does this show your customer base that you care about transformation, but it shows your staff that you are dedicated to righting the wrongs of previous lawmakers – with equal opportunity for all.

How to Become BEE Compliant

The first step towards BEE compliance is to speak to those who make BEE their business. Speak to us about how we can help you achieve your BEE status today!

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