This guide will help you to understand how the BEE verification process works.
There are different annual turnover classifications for Exempt Micro Enterprises, Qualifying Small Enterprises and Generic Enterprises depending on the type of industry a business operates in. Note that you will need a certificate even if your business qualifies for exemption. The first step in the verification process is to understand which category your business falls into.
Exempt Micro Enterprise (EME)
If your business falls into this category it automatically qualifies as a 100% contributor towards BEE and you will receive a Level 4 BEE certificate. Businesses that have a Black Shareholding of more than 50% will qualify as 110% BEE contributors and will receive a Level 3 BEE certificate.
Qualifying Small Enterprise
If your business falls into this category then it’s measured against a QSE BEE Scorecard. This scorecard allows a business to be measured against the relevant Sector Code or the B-BBEE Codes of Good Practice. The measured entity may select four of the seven elements on which to be rated; each element contributing 25% to the total score.
If your business falls into this category then it’s measured against a generic BEE scorecard in terms of all seven elements of BEE.
Each element is given a value in points. There are a total of 100 points available on the overall performance of the measured entity, using either the Generic or the QSE Scorecard. It receives a BEE Level as follows:
The certification process
BEE legislation is complex and it may make sense for you to engage the services of a verification agency that can explain how the ratings work, help you decipher the Codes and understand what is required of your company. An agency will provide you with a consultant who will help you identify, collate and analyse your B-BBEE compliance documentation.
In 2011, new legislation in the form of changes to the Codes of Good Practice stipulates that only entities accredited either by SANAS or by the IRBA may issue a BEE Certificate. This makes any BEE Certificate issued by non-accredited entities not only illegal but also invalid and therefore worthless.
Generally, to apply for certification you will need to submit an application form and a company profile. This will be followed by a site visit to verify the information you have supplied.
This information will be analysed by the agency and risk areas will be identified. A report will then be issued, along with a verification certificate. The overall verification score will be issued as per guidelines in the Codes of Good Practice.
For an average medium-sized business this process should not take more than two weeks.
Costs are dependent on the size of the business and a quote will be provided by the agency based on your needs. An EME can expect to pay around R600 for a certificate.