New Companies are exempt from BEE for a year

7th December 2006

It s being reported that any new company is exempt from BEE for a period of one year. This means that if you start up a new business, no matter the size, it will be a level 4 company for the first year, while you are getting the business off the ground.

NB. The codes around fronting still apply – ie. it will not allow you to close down your business only to re-open it again in order to avoid the requirements of BEE..

In many cases the codes ARE making life easier for small businesses as well as for startup businesses, while retaining the fairly stringent BEE requirements for large companies.

Government has often stated that it wants to support small businesses. By easing BEE requirements on small businesses, it is making our lives a bit easier, and removing the admin associated with BEE. 

It is also reported that government is changing other legislation in line with the BEE act – this means that all government entities will apply the same requirements in their tendering process. We have been very critical of organizations like ESKOM which use their own, non-BEE tendering criteria. This is the biggest reason why we have been critical of the delays in issuing the new codes. Hopefully it will now change

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