We are proud to announce that we rated a Level 2 contributor for our BEE (Broad-Based Black Economic Empowerment) audit, with a procurement recognition level of 125%, done by Smith & Smith BEE Verification Agency.
When must the business entity be compliant?
On 6 January 2004 Government passed into law the Broad-Based Black Economic Empowerment Act, No. 53, 2003.
Although there are no direct financial penalties that could be applied to non BEE compliant businesses, the system ensures that Procurement managers and Buyers will favour businesses that are compliant since that enhances their own BEE Scorecard under the Preferential Procurement element provisions.
Do all business entities have to be B-BBEE compliant?
Only business enterprises (those classified as ‘Exempted Micro Enterprises’) with an annual turnover of R5 Million and less will be exempted. Such entities will automatically be recognized as Level Four B-BBEE Contributors with a procurement recognition level of 100%.
Start-up enterprises are Exempted Micro-Enterprises for the FIRST YEAR following their formation or incorporation regardless of their expected revenue. Tendering for contracts above R5 million does require Scorecard submission.
Businesses that are not exempt fall into one of two categories:
•Those with an annual turnover between R5 Million and R35 Million are measured under the QUALIFYING SMALL ENTERPRISES (‘QSE’) codes.
•Those with a turnover of R35 Million and above are measured under the GENERIC SCORECARD codes.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.