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The BEE Codes

Definition of BROAD BASED BEE

Broad-Based BEE is the economic empowerment of all black people through diverse but integrated socio-economic strategies. BEE is more than a way to address past inequalities, it is a tool to broaden the country’s economic growth and accelerate growth, job creation and poverty eradication. If BEE does not result in higher profits for your company, then the economy will not grow as a result of it, and that is the real purpose of BEE: a bigger economy where all South Africans can participate and benefit.

A Black person is any African, Coloured & Indian South African citizen.


Who must comply with BEE?

The following entities are bound by the Codes and must implement BEE:

  • all organs of state;
  • all public entities listed in schedules 2 and 3 of the Public Finance Management Act;
  • any enterprise which undertakes any business with any organ of state or public entity.
  • any private sector business providing goods or services to another business which is subject to measurement under the Codes, may be required to provide evidence of its own level of compliance to its customer and, to that extent, will be subject to measurement under the Codes;
  • companies limited by guarantee;
  • Higher Education Institutions;
  • Non-profit Orginasations;
  • Public Benefit Schemes;
  • Section 21 companies.

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Who are the intended beneficiaries of BEE?

A black person is an African, Coloured or Indian South African citizen (in other words a natural person and not a company) who meets any of the following requirements:

  • he/she must be a citizen of the Republic of South Africa by birth or by descent; or
  • he/she must be a citizen of the Republic of South Africa by naturalisation which was completed prior to the coming into effect of the Constitution of the Republic of South Africa Act of 1993; or
  • if he/she only became a citizen of the Republic of South Africa by naturalisation after the coming into effect of the Constitution of the Republic of South Africa Act of 1993, but who, without the Apartheid policy, would have been entitled to acquire citizenship by naturalisation prior to 1993.

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BEE Codes Of Good Practice In A Nutshell

The new BEE Codes have been gazetted on 9 February 2007.
The following are some of the most important changes:

Exempted Enterprises

If your business has an annual turnover of less than R5mil you are classified as an exempted micro enterprise. If your exempted business is white owned, you automatically receive a BEE Score of 65% and if your business is more than 50% black owned, you automatically receive a BEE score of 75%.

White exempted businesses will therefore be less competitive in the tendering process if they tender against black owned businesses.

Exempted businesses could however obtain a verified BEE Scorecard if they want to improve their BEE status.

Qualifying Small Enterprises

If your annual turnover is between R5mil and R35mil you are classified as a qualifying small enterprise. This entitles you to choose any four of the 7 BEE elements to generate your BEE score and status level.
See BEE scorecard for Qualifying Small Enterprises

Generic Enterprises

If your annual turnover is more than R35mil you have to generate a BEE score out of all 7 elements.
See BEE Scorecard for Generic Enterprises

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