When structuring a partnership to introduce a BEE partner to your small company you will need some background and legal knowledge of BEE. The B-BBEE act looks to empower in all sectors, the Codes of Good Practice is used to measure and assigns level depending on BEE compliant.
Currently there are 7 elements that measure compliance namely; ownership, management control, employee equity, skills development, preferential procurement, enterprise development and socio-economic development. The turnover of your small business is important in determining the extent of your legal obligation to comply with legislation to obtain your BEE certificate. There are three categories for a small business to fit into.
1.Exempt Micro Enterprise (EME)
This is a small business with a turnover of less than R5 million annually. EME's do not have to comply with any of the seven elements to determine BEE certificate level as EME's automatically qualify for a level 4 BEE certificate. A small business can therefore easily obtain a BEE certificate.
2.Qualifying small enterprise (QSE)
this is a small business with a turnover between R5 million and R35 million. In order for QSE's to qualify for a BEE certificate they are legally required to fulfill four out of the seven elements to determine BEE certificate level. The four elements can be chosen by the small business
For one year after a company's formation the small company will qualify for a level 4 BEE certificate. Start-ups are viewed as an EME and your small business will have a 100% procurement recognition status according to BEE certificate level 4.
Key principles to be applied in measuring BEE compliance
Initiatives that have not BEE implemented are not taken into account
BEE representatives must have evidence and documents to support their BEE status
Misinterpretations of an enterprises BEE level will lead to the scorecard being disqualified
It is important that your small business use these principles when fulfilling its' BEE certificate requirements and you are informed of the laws and Codes of good Practice surrounding bee certificate measurements and requirements. ensure there is a written agreement between the small business and the bee partner this is dependent on the small business.
It is also advised that you obtain the BEE certificate for your small business from a reputable source