On 3 September 2018, the Broad-Based Black Economic Empowerment Commission issued a Practice Guide, which clarified the Broad-Based Black Economic Empowerment (B-BBEE) requirements for Exempted Micro Enterprises (“EMEs”) and Qualifying Small Enterprises (“QSEs”).

EMEs are start-up entities, or entities with a turnover of less than R10 million, whilst QSEs are Black South African controlled and owned entities with a turnover of between R10 million and R50 million under the B-BBEE Amended Codes of Good Practice. These entities only have to complete an affidavit to evidence their B-BBEE compliance status.

This mechanism was specifically introduced to reduce or lessen the burden and the cost of compliance on small and medium entities. It is important to note that specific B-BBEE Sector Codes may have different turnover thresholds for EMEs and QSEs and may have specific industry  EME and QSE affidavits that must be used. There are also exceptional cases, for example in the Transport Industry, where EMEs have a choice of obtaining accounting letters or being verified by a South African National Accreditation System (“SANAS”) accredited rating agency. This is because the Transport Sector Code has not yet aligned to the Amended Generic Codes and therefore cannot use B-BBEE Affidavits as evidence of B-BBEE compliance.

The affidavit mechanism has led to the mushrooming of fraudulent B-BBEE affidavits, as affidavits are easier to produce as a form of proof of an entity’s B-BBEE compliance status. Measured Entities that are subject to verification, require proof from their suppliers and beneficiaries of their B-BBEE status to obtain points under Enterprise and Supplier Development, including Preferential Procurement. This proof often takes the form of an affidavit.  Measured Entities need to authenticate the information on the affidavits they receive. Invalid affidavits could affect the Measured Entity’s scorecard, particularly on the procurement, Enterprise Development and Supplier Development elements. If the Measured Entity procures from a supplier or contributes to a beneficiary whose affidavit is incorrect or invalid, no points will be awarded for that specific supplier’s/beneficiary’s spend. The Measured Entity could additionally be at risk of losing points or having a negative error rating applied due to the invalid B-BBEE affidavits.

The B-BBEE Commission’s Practice Guide as well as industry developments specify the following key information in determining the validity of a sworn affidavit:

  • The name of deponent as they appear in the identity document and the identity number must be completed.
  • The designation of the deponent as either the director, owner or member must be indicated to know that person is duly authorised to depose of an affidavit.
  • The name of enterprise as per enterprise registration documents issued by the CIPC, Trade as name where applicable, and enterprise business address must be completed. 
  • The registration number and VAT number of the business must reflect.
  • The nature of business, which may indicate that a sector specific affidavit is required, must be completed to the best of the deponent’s knowledge.
  • The percentage of Black ownership via flow through principle (direct ownership), Black female ownership and whether they fall within a Designated group must be completed with the correct percentages reflected.
  • The affidavit must indicate the total revenue (or revenue threshold) for the financial year under review and whether it is based on audited financial statements or management accounts.
  • Financial year-end as per the enterprise’s registration documents, which was used to determine the total revenue, must be completed in full (i.e: 28 February 2025). The period must be the latest financial period to have concluded and cannot be based on a future financial period.
  • The B-BBEE status level must be indicated with a tick or an X in the box provided. An enterprise can only have one status level which must align to the rules governing EME/QSE Black Shareholding and applicable automatic B-BBEE Levels.

EMEs

  1. 0% - 50.99% Black South African Shareholding will have an automatic Level 4 status.
  2. 51% - 99.99% Black South African Shareholding will have an automatic Level 2 status.
  3. 100% Black South African Shareholding will have an automatic Level 1 status.

QSEs

  1. 0% - 50.99% Black South African Shareholding must proceed to verification with a SANAS accredited Rating Agency.
  2. 51% - 99.99% Black South African Shareholding will have an automatic Level 2 status.
  3. 100% Black South African Shareholding will have an automatic Level 1 status.
  • Date deponent signed and date of Commissioner of Oath signature must be the same.
  1. Signatures may not be electronic as the affidavit must be signed in front of a Commissioner of Oath.
  2. Commissioner of Oath cannot be an employee or ex officio of the enterprise because, a person cannot by law, commission an affidavit in which they have an interest.

EMEs and 51% Black Owned and Controlled QSEs can use the affidavit templates that are available on the Department of Trade, Industry and Competition (“dtic”) website at no cost. Alternatively, feel free to reach out to one of our RSM B-BBEE Consultants who will be able to assist you with EME and QSE affidavits as per your sector specific industry.

Need help with B-BBEE? Our tailored solutions will help you navigate compliance, optimise your scorecard and drive meaningful transformation. Partner with us for strategic insights and seamless verification preparation.

Edson Munetsi
Business Unit Head, Johannesburg

And

Chanelle Zeeman
Assistant Manager: B-BBEE, Johannesburg

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