Definition of: Exempt Micro Enterprise (EME)

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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.

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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.

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