Did You know EME’s can get a minimum of a level 4?

  EME Affidavit – A certain group of businesses are exempt from B-BBEE – Exempt Micro Enterprises (EMEs). According to the Amended BEE Codes of Good Practice, an EME is an enterprise that has a turnover of no more than R10 million per annum. EME businesses that are black-owned are allocated an enhanced level. Black-owned businesses with a turnover of less than R50 million (black-owned QSE’s) per annum are awarded a special dispensation to supply documentation similar to an EME affidavit to justify their BEE status.

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EMEs that are required to follow a sector code may have different requirements as they will still need to comply with their respective charter.  
Sector Code
Turnover Threshold
Amended Codes Of Good Practice – Oct 2013<R10 million
Amended Codes Of Good Practice – Oct 2013 – Black Owned QSE’s<R50 million
Codes Of Good Practice – Feb 2007, Construction Sector – Contractors, Forest Sector, Transport, ICT, Agri and Chartered Accountancy<R5 million
Construction Sector – Built Environment Professionals<R1.5 million
Tourism Sector<R2.5 million
FSC, PropertySpecial requirements

Learn more about the definitions

The Amended Codes of Good Practice were issued in October 2013. They provide a grace period of 12 months, although companies have a choice to voluntarily comply with the Amended Codes. A key benefit of this is that the EME threshold has been increased from R5 million per annum to R10 million. In addition, the documentation requirements have become easier to comply with. EME’s now only need a suitable affidavit document to justify their status.

EMEs need do no more than inform their customers that they are exempt. Even if they are Exempt they need to ensure that the correct and most appropriate information is given to their customers to avoid any fronting issues.   To save you time EconoBEE can design an Affidavit that complies with the requirements as set out by the Amended Codes of Good Practice. In addition to the Affidavit, we will also provide you with a document that assists you in getting this message across to your customers, who invariably may still not understand how BEE operates.  

The following documents are included in your EME Document Pack

EME Affidavit EME Exemption Statement Summary Statement to Customers explaining your BEE status   Costs: R1250 incl VAT EME Pack production – Amended Codes (Below R10 million per annum) R999 incl VAT for an annual renewal – Amended Codes R899 incl VAT EME Pack Production – Standard Codes (Below R5 million per annum) R699 incl VAT for an annual renewal – Standard Codes R3250 incl VAT QSE Pack production – Amended Codes (Black Owned QSE’s only)   How to obtain this service – Email eme@econobee.co.za and we will send you a short questionnaire from which we will design your own BEE exemption statement.   [contact-form-7 id=”2942″ title=”Contact form 1_copy_copy_copy(definitions)_copy”]

Did You Know

The Broad-Based Black Economic Empowerment Act, act 53 of 2003 makes provision for a set of Codes of Good Practice to define requirements for becoming B-BBEE compliant. The codes were gazetted on 11th October 2013 in government gazette 36928. Paragraph 4.1 states that any enterprise with an annual Total Revenue of R10 Million or less qualifies as an Exempted Micro-Enterprise. Paragraph 4.2 states that an Exempted Micro-Enterprise is deemed to have a B-BBEE Status of “Level Four Contributor” having a B-BBEE recognition level of 100% under paragraph 8.2. Paragraph 4.3 states that an enhanced B-BBEE recognition level for an Exempted Micro-Enterprise is as follows: 4.3.1 Despite paragraphs 4.2 an EME which is 100% Black-owned qualifies for elevation to “Level One Contributor” having a B-BBEE recognition level of 135%. 4.3.2 Despite paragraph 4.2 and 4.3.1, an EME which is at least 51%Black owned qualifies for elevation to “Level Two Contributor” having a B-BBEE recognition level of 125%. Paragraph 4.4 states that despite paragraphs 4.2 and 4.3, an EME is allowed to be measured in terms of the QSE scorecard should they wish to maximise their points and move to a higher B-BBEE recognition level. Paragraph 4.5 states that an EME is only required obtaining a sworn affidavit on an annual basis, confirming the following: 4.5.1 Annual Total Revenue of R10 million or less; and 4.5.2 Level of Black ownership. Paragraph 4.6 states that any misrepresentation in terms of Para 4.5 above constitutes a criminal offence as set out in the B-BBEE Act as amended. Paragraph 6 statement 000 START-UP ENTERPRISES 6.1 Start-up Enterprise must be measured as an Exempted Micro-Enterprise under this statement for the first year following their formation or incorporation. This provision applies regardless of the expected total revenue of the Start-up Enterprise. 6.2 Start-up Enterprise is deemed to have the qualifying B-BBEE Status in accordance with the principles of paragraph 4 of this Statement. 6.3 In order to qualify as a Start-up Enterprise, the enterprise must provide an independent confirmation of its status in accordance with paragraph 4.5. 6.4 Despite paragraph 6.1 and 6.2, a Start-up Enterprise must submit a QSE scorecard when tendering for any contract or seeking any other economic activity covered by Section 10 of the Act, with a value higher than R10 million but less than R50 million. For contracts of R50 million or more they should submit the Generic scorecard. The preparation of such scorecards must use annualised data.