How We Can Help You

Jul 9, 2015 | B-BBEE Blog

If B-BBEE is a strategic imperative and business opportunity, engage MD Accountants & Auditors Inc. to assist you with strategy and compliance.

Broad-Based Black Economic Empowerment (B-BBEE) is arguably the greatest strategic issue, challenge, threat and potential opportunity facing businesses in South Africa today.

B-BBEE is a strategic imperative for many businesses; particularly those impacted by public sector procurement, licencing and concessions, grants and incentives and private-public partnerships.

B-BBEE has a variety of elements; and is not only limited to ownership and management considerations.

Essentially, the practical working of B-BBEE requires a business to ensure that it measures its B-BBEE status based on the Amended Codes of Good Practice. MD Accountants & Auditors Inc. has the expertise to assist with all your B-BBEE verification and compliance needs.

B-BBEE consists of 5 elements:

  1. Ownership:  measures black ownership of the entity
  2. Management Control:  measures the board and management control by black people
  3. Skills Development:  measures skills development spend on black employees, as well as learner ships, apprenticeships and internships
  4. Enterprise and Supplier Development:  measures procurement spend from empowering suppliers, as well as Supplier Development and Enterprise Development contributions to EME and QSE beneficiary entities that are at least 51% black owned; contributing to their development, sustainability, and financial and operational independence
  5. Socio-Economic Development:  measures contributions contributing to socio-economic development

Depending on the total number of points scored for the elements, a certain B-BBEE status and recognition level is achieved:

B-BBEE status Qualification points using the amended scorecard B-BBEE procurement recognition level
Level 1 contributor ≥ 100 135%
Level 2 contributor ≥ 95 but < 100 125%
Level 3 contributor ≥ 90 but < 95 110%
Level 4 contributor ≥ 80 but < 90 100%
Level 5 contributor ≥ 75 but < 80 80%
Level 6 contributor ≥ 70 but < 75 60%
Level 7 contributor ≥ 55 but < 70 50%
Level 8 contributor ≥ 40 but < 55 10%
Non-compliant contributor < 40 points 0%

B-BBEE Categories:

Your business falls into one of these three categories:

  • Exempted Micro-Enterprise (EME)

Has an annual turnover of R10 million or below. An automatic Level 4 (100%) contributor status is achieved. Enhanced recognition of Level 1 (135%) if 100% black owned or Level 2 (125%) if 51% or more black owned.

  • Qualifying Small Enterprise (QSE)

Has an annual turnover between R10 and R50 million. The entity will need to score on all 5 elements. Enhanced recognition of Level 1 (135%) if 100% black owned or Level 2 (125%) if 51% or more black owned.

  • Generic Enterprise

Has an annual turnover above R50 million. The entity will be scored on all 5 elements.

Elements Ownership Management control Skills development Enterprise and Supplier Development Socio-Economic Development
Generic points 25 15 (19) 20 +5 40 +4 5

Our B-BBEE service offering:

B-BBEE verification

B-BBEE verifications are performed in accordance with the Amended Codes of Good Practice and Sector Codes.

Preparation for verification

Should an entity appoint another agency to perform its verification, we can assist in preparing for the verification by collating the necessary information and documentation. 

B-BBEE strategy development, implementation and other technical consulting services

MD Accountants & Auditors Inc. consults on many B-BBEE related issues including ownership deals, scenario planning, strategy development and implementation. Consultations are also held to explain the key principles of B-BBEE and how it works.

B-BBEE training and workshops

B-BBEE training and workshops are held on an ad hoc basis and can be held in-house for staff members. The principles, elements and requirements of B-BBEE are dealt with in an understandable and interactive manner. Delegates receive full course notes.

Sector codes and consultation

Various sectors in South Africa are governed by Sector Codes. The sectors affected by the Amended Codes are the construction, tourism, transport, forestry, chartered accountants, property, ICT, financial and agri-BEE sectors. These codes are specific to an industry sector and contain differences from the Amended Codes of Good Practice. MD Accountants & Auditors Inc. can assist entities in these sectors understand what is required, as well as perform the verification.

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