Original publish date – Fri, 26 Nov 2010 06:51:26 +0000, MPUMULO MAPHOSA

The Codes of Good Practice provide for 3 categories of broad-based Black Economic Empowerment compliance and the only criteria used to define these categories is a measured entity’s total annual revenue. The listed categories therefore include:

  1. Exempted Micro Enterprise
  2. Qualifying Small Enterprise
  3. Generic Enterprise

In this article we will focus on the first category; Exempted Micro Enterprises.

What Is An Exempted Micro Enterprise (EME)?

Measured entities with less than R5m annual turnover are accordingly exempted from producing a BEE Scorecard. Annual turnover thresholds for the Tourism and Construction (Built Environment Professionals) industries is R2,5m and R1,5m respectively. Qualifying entities are therefore regarded as Exempt Micro Enterprises (EMEs) and are deemed to be automatic level 4 (four) BEE Contributors. Any qualifying purchases from such an enterprise can be claimed at 100%. In a scenario where black ownership is more than 50%, such an entity is deemed as a level 3 BEE contributor whereupon Procurement Recognition is at 110%.

Start-up companies are regarded as EMEs for the first year following their formation regardless of their expected revenue with the exception of tendering for contracts above R5million.

What Does an EME Need?

An EME must obtain the relevant documents as full proof for their status. At EconoBEE this is a very short and simplified process, which has a turnaround time of 2 working days. For further information, please contact us at eme@econobee.co.za or 0861 11 3094