Exempted Micro Enterprises (EME’s)

As of the 5th of May 2015 communication from the Dti confirms the following:

  1. If your financial year end is before 30 April 2015 and you have not yet completed your verification, you may continue to obtain a verification using the 2007 Codes requirements.  However, if your financial year end is after 01 May 2015, you will be required to use the 2013 Codes requirements, unless the Sector Codes are applicable to you.
  2. If you are measured under a Sector Code, you may continue being rated according to that Code as the transition period has been extended to 31 October 2015.  New Sector Codes will only be effective from 01 November 2015, which means the current sector codes apply until then.

With the new B-BBEE Codes of Good Practice gazetted on 11 October 2013, enterprises with an annual turnover less than R10 million or are recently formed or incorporated entities that have been in operation for less than one year. (start-up enterprises) Start-up companies qualify as an Exempted Micro Enterprise (“EME”) and are exempt from being measured on a BEE scorecard.    

Any EME automatically qualifies as follows:

    • 100% black owned EME – level 1 BEE status and a procurement recognition level of 135%
    • 51% or more black owned EME – level 2 BEE status and a procurement recognition level of 125%
    • Any other EME – level 4 status and a procurement recognition level of 100%

In addition, a 51% black-owned Qualifying Small Enterprise (“QSE” - an entity with a turnover less than R50 million per annum) also qualifies for automatic recognition as follows:

    • 100% black owned QSE – level 1 BEE status and a procurement recognition level of 135%
    • 51% or more black owned QSE – level 2 BEE status and a procurement recognition level of 125%

A 51% Black Owned entity means an entity in which:

    • black people hold 51% or more of the exercisable voting rights;
    • black people hold 51% or more of the economic interest; and
    • has earned all points for Net Value

An EME does not need a BEE certificate. An EME is only required to submit an affidavit declaring that their turnover is less than R10 million and the percentage of their black ownership. Likewise, a 51% black-owned QSE is only required to produce an affidavit.

Please note an EME for Specialised Enterprises which is 75%  or more black owned automatically qualifies as a Level 1 BEE supplier.  An EME which is 51% Black Owned automatically qualifies as a Level 2 BEE supplier.

Under the amended BEE Codes all businesses have been given the target of buying 15% of Total Measured Procurement Spend from EME's each year, thereby increasing the opportunities for growth of EME’s in the country.

If you are measured under a Sector Code, you may continue being rated according to that Sector Code until that Sector Code has been gazetted as a final Sector Code under s 9(1). There are three sector Codes that have been gazetted as such:

    • ICT
    • MAC
    • Tourism

All other Sector Codes operate under the existing Sector Codes, other than Construction and Chartered Accountancy, as these two Sector Codes were formally repealed by the Minister of Trade and Industry.

Empowerdex is able to assist you to do an Ownership Analysis Verification Certificate which can accompany your affidavit. An ownership verification is required especially if your company is an investment entity, or has ownership in other entities.  It is not required for procurement purposes however, an Ownership Certificate and affidavit is valid for 12 months from the date displayed.

Please contact your local office and speak to a Client Service Consultant in order to ask about the cost of an Ownership certificate and complete the necessary application required.

For your benefit please note the definitions:

Black = African, Coloured and Indian South African Citizens
Black individuals has the meaning defined in the Act qualified as including only natural persons who are citizens of the Republic of South Africa by naturalization:

    • Occurring before the commencement date of the constitution of the Republic of South Africa Act of 1993; or
    • Occurring 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 naturalization before then.

A 51% Black Owned entity means an entity in which:

    • black people hold 51% or more of the exercisable voting rights;
    • black people hold 51% or more of the economic interest; and
    • has earned all points for Net Value

 

 

More in this category: Qualifying Small Enterprise (QSE) »