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The Broad-Based Codes of Good Practice were launched in 2007 and provided a framework for measurement of Broad-Based Black Economic Empowerment (BBBEE) in terms of the BEE Act 53 of 2003. On 11 October 2013 an amendment to the codes was published.

The amended codes included a transitional period during which companies could prepare for measurement under the amended codes. The original transitional deadline was 12 October 2014. This deadline was extended on 18 March 2014 to 1 May 2015. Effectively, all measured entities must use the amended codes as a basis for measurement.

The amended codes apply to Exempt Micro Enterprises (EME), Qualifying Small Enterprises (QSE), and Generic Sized Entities (GSE).

In terms of the previous codes, EMEs were required to obtain an EME certificate from an accounting officer stating whether the EME did in fact qualify as such.

The new codes, effective from 1 May 2015, state that verification as an EME is no longer dependent on obtaining a certificate issued by an accounting officer. The thresholds determining whether an entity qualifies as an EME has also been amended.

Under the new amended codes an EME is only required to obtain a sworn affidavit from the owners/manager on an annual basis confirming the following:

  • Annual total revenue of R10 million or less
  • Level of black ownership

Any misrepresentation in terms of the above constitutes a criminal offence.

Under the new codes any enterprise with an annual turnover of R10 million or less qualifies as an EME.

An EME is deemed to have a B-BBEE status of level 4, with contributors having a B-BBEE recognition level of 100%. However, an EME that is 100% black owned qualifies for elevation to a level 1 contributor, having a B-BBEE recognition level of 135%. An EME that is at least 51% black owned qualifies for elevation to a level 2 contributor having a B-BBEE recognition level of 125%.

Verification of QSEs and Government Sponsored Entities (GSEs) may only be performed by either a South African National Accreditation System (SANAS) accredited verification agency or an Independent Regulatory Board of Auditors (IRBA) accredited auditor. Accounting officers may not issue verification certificates for these types of entities.