Black Owned QSEs

The Amended codes state that a QSE has a turnover of between R10m and R50m ( as long as it does not fall into a defined sector code).

Extract from paragraph 3 of statement 000:    A Qualifying Small Enterprise is required to comply with Ownership as a compulsory element, and either Skills Development or Enterprise and Supplier Development.

3.3.3 DISCOUNTING PRINCIPLE EFFECT    Non-compliance with the 40% sub-minimum requirements of any of the priority elements, as per paragraph 3.4.2 above, will result in the following outcomes for both Large Enterprises and Qualifying Small Enterprises: The actual points scored by the Measured Entity and the consequent level that the Measured Entity would have achieved were it not for non- compliance with the 40% sub-minimum requirements will be recognised by the Verification Agency (“the Recognition Level”); Notwithstanding the recognition in above, the Measured Entity’s B-BBEE status level will be discounted by one level down until the next applicable verification period in which the Measured Entity can demonstrate compliance with the 40% sub-minimum requirements, at which point the Recorded Level will become the applicable ratings level for that Measured Entity in that verification period.

This implies that whatever level is achieved, that level must drop by 1, if the discounting principle comes into effect.


Paragraph 5 of statement 000 states:

5.1   Enhanced B-BBEE recognition level for QSE:
5.3.1 A Qualifying Small Enterprise which is 100% Black owned qualifies for a Level One B-BBEE recognition.
5.3.2 A QSE which is at least 51% Black owned qualifies for Level Two B-BBEE recognition level.

It must be noted that paragraph 5 does not absolve any business from meeting the requirements of the dicounting principle. In otehr words a 100% black owned QSE still has to meet the requirements of Ownership plus EITHER skills development OR Enterprise and Supplier Development. By definition a black owned QSE meets the requirement of Ownership, but it still needs to prove that it meets one of the two orther priority elements, failing which it must drop one level to level 2, or level 3 if it is at least 51% black owned.