B-BBEE (Broad-Based Black Economic Empowerment) requires large companies to be measured against a full scorecard. If your turnover is under R10 million, your B-BBEE status is confirmed with a single free sworn affidavit. This guide covers which tier you're in, what level you get, how buyers use your level and the rules to follow.

Why B-BBEE matters even if you're small

A B-BBEE status is not a legal requirement, and it is not a tax. It affects which customers can buy from you on favourable terms. Large companies, government departments and state-owned entities are scored on the B-BBEE status of their suppliers under the preferential procurement rules, so they prefer suppliers with a higher level. Your B-BBEE status can decide whether you make a tender shortlist.

If you sell to corporates or government, or plan to, your level affects whether they can buy from you and how much procurement recognition they get for doing so. A supplier with no status can be left off the shortlist.

The three turnover tiers

The system sorts businesses by annual turnover into three tiers. The smallest tier has the simplest requirements:

  • EME — Exempt Micro Enterprise: turnover under R10 million. Exempt from the full scorecard. Needs only a sworn affidavit.
  • QSE — Qualifying Small Enterprise: turnover R10 million to R50 million. If at least 51% black-owned it can also use an affidavit; otherwise it needs a formal verification certificate.
  • Generic: turnover over R50 million. The full B-BBEE scorecard and verification apply.
Under R10m
the turnover threshold below which your business is an EME and needs only a free sworn affidavit, which you can complete yourself

What level does an EME get?

As an EME, your level is decided by your ownership:

  • Level 4: every EME starts at Level 4, whoever owns it.
  • Level 2: if the business is at least 51% black-owned.
  • Level 1: if the business is 100% black-owned.

Level 1 is the top score, meaning a customer gets the most B-BBEE recognition for buying from you. A 100% black-owned micro business can hold the highest B-BBEE level with a free affidavit. It does not need a consultant, a paid verification or a scorecard.

How the EME affidavit works, step by step

An EME affidavit is a sworn statement confirming two things: your annual turnover is under R10 million, and your level of black ownership. There's a standard government format (the DTIC template), it's valid for twelve months, and the only cost is the trip to have it commissioned. The process:

  1. Confirm your latest annual turnover is under R10 million — from your financial statements or management accounts.
  2. Work out your black ownership percentage from the share register. The levels change at 51% and 100%.
  3. Complete the standard EME affidavit template with your company details, turnover band and ownership percentage.
  4. Take it to a Commissioner of Oaths — a police station, many banks, or a lawyer — and sign it in front of them. There is no charge.
  5. Give the commissioned affidavit to any customer who asks for your B-BBEE status.
  6. Redo it every twelve months, or sooner if your turnover or ownership changes.

As an EME, the affidavit legally stands in place of a formal B-BBEE certificate from a verification agency. A micro business does not have to pay for a certificate.

Growing into a QSE

Cross R10 million turnover and you become a QSE. If you're at least 51% black-owned, you can still use a sworn affidavit. If you're below 51% black-owned, you'll need a formal verification certificate from an accredited agency, measured against a scorecard. Cross R50 million and you're 'generic', with the full scorecard and full verification, and B-BBEE advice becomes part of your planning. For a business without majority black ownership, crossing R10m is the point where the free affidavit stops and paid verification starts.

How your customer uses your status

When a corporate or government buyer spends money with you, they claim preferential procurement points on their own scorecard, and the number of points rises with your B-BBEE level. Spend with a Level 1 supplier is 'recognised' at 135% of the rand value, and with a Level 4 supplier at 100%. Lower levels count for less. Buying from a Level 1 EME adds more to the customer's scorecard than buying the same thing from an unrated supplier, so your affidavit gives the buyer scorecard points.

Ownership points and the bigger picture

Ownership is the heaviest-weighted element in B-BBEE, and it decides your EME level. For larger businesses (QSE and generic) the scorecard also measures management control, skills development, enterprise and supplier development, and socio-economic development . An EME is exempt from all of these. If your business grows past R10 million, take B-BBEE advice, because different rules apply and the level is no longer automatic. If you plan to bring in a shareholder, the ownership split you choose affects your future level, so consider the B-BBEE effect when you decide it.

B-BBEE rules for small businesses

  • B-BBEE status is not compulsory. Corporate and government buyers score their suppliers on it.
  • Under R10m turnover, a free sworn affidavit legally stands in place of a certificate.
  • Every EME is automatically Level 4. Black ownership of at least 51% raises the level to 2, and 100% raises it to 1.
  • B-BBEE is a scoring system used by buyers. Nothing is paid to SARS.
  • An EME completes the affidavit itself and signs it at a Commissioner of Oaths. Consultants work with businesses on the scorecard tiers.
  • An affidavit is valid for twelve months, and must be redone sooner if your turnover crosses R10m or your ownership changes. An expired affidavit is not accepted on a tender.

The affidavit is a sworn legal statement, so the turnover and ownership figures must be true. Overstating black ownership to obtain a higher level is fronting, a serious offence with criminal penalties under the B-BBEE Act. It also ends customer relationships when a verification uncovers it.

Worked examples

An EME affidavit at Level 1

A 100% black-owned Pty Ltd with R4m turnover wants to supply a large retailer. It's an EME, so it swears a free B-BBEE affidavit confirming turnover under R10m and 100% black ownership, which makes it Level 1. The retailer, scored on its own suppliers, can count the spend at the highest recognition level, and the small business wins the contract. The affidavit costs nothing.

Growing across the R10m line

A services firm, 40% black-owned, grows from R8m to R12m turnover. As an EME it used a free affidavit at Level 4. Now it's a QSE and, because it's under 51% black-owned, it can no longer use an affidavit. It needs a formal verification certificate against the QSE scorecard. If it does not arrange this before its next tender, the old affidavit will not be accepted.

Where we can help

Your turnover figure and ownership structure need to be correct, and both depend on how your company is set up and growing. We'll confirm your tier, help you complete the affidavit, and tell you in advance when growth will move you into the next tier. Book a discovery call to start.