01/03/2023
The importance of a BEE certificate in your company
Broad-Based Black Economic Empowerment is a policy initiative aimed at empowering businesses and assisting communities. How can businesses comply?
Broad-Based Black Economic Empowerment, more commonly referred to as B-BBEE is an important factor, especially in South Africa and the African economy overall.
This policy aims to ensure that the economy in South Africa is structured and transformed in such a way that it allows for the meaningful participation of its citizens to create capacity in the broader economic landscape through:
Training and development
Employment Equity
Socio-Economic Development
Preferential Procurement
Enterprise Development
Promoting the entry of black entrepreneurs into the mainstream economic activity
BEE aims to achieve the following objectives:
To transform the economy of South Africa and to allow for meaningful participation of black people. It also aims to change the racial profile of company owners as well as their managers, and skilled professionals.
To increase black ownership and management of companies to include black women, communities, workers, cooperatives, and others as well as helping them access economic opportunities.
To promote investment which leads to broad-based and meaningful participation in South Africa’s economy by black people.
To help rural as well as local communities access economic opportunities.
Why must you ensure that you have a BEE Certificate?
B-BBEE policies are set out in the corresponding BBBEE Act, No. 53 of 2003, and they are reinforced by the Codes of Good Practice. While it is an entirely voluntary process and companies are not forced to obtain their BEE Certificate, there are several benefits attached to this.
Businesses with an annual turnover (sales) of more than R10 million and less than 51% black ownership, must consider obtaining a valid B-BBEE certificate while those who have more than 51% black ownership, and businesses with an annual turnover of less than R10 million could have a BEE affidavit that serves as their B-BBEE Certificate.
Businesses with an annual turnover of more than R50 million does not qualify for a BEE affidavit irrespective of their level of black ownership.
Such companies must be verified to determine their BEE compliance level. It is easy to obtain a professional, system-generated affidavit from company partners. CIPC (Companies and Intellectual Properties Commission) or get the latest approved DTIC (Department of Trade, Industry and Competition) affidavits from DVS BEE Services.
Companies must understand, implement, and monitor their BEE score to ensure that they are compliant with the applicable sector codes, rules, and regulations in South Africa.
The pillars for a company’s B-BBEE scorecard each hold a certain weight in their respective contribution to B-BBEE compliance, with compliance calculated as follows for large companies with an annual turnover of more than R50 million:
Black Ownership – 25 points
Management – 19 points
Skills Development – 20 points
Preferential Enterprise Development – 40 points
Socio-Economic Development – 5 points
The B-BBEE scorecard for smaller companies measures the same elements but the weightings are slightly different. Sector codes may also differ in their points allocation and compliance requirements.
B-BEE certificates can only be issued by verification agencies approved by the South African National Accreditation System (SANAS).
Certificates and affidavits are valid for one year from the date of issue and must be renewed annually. BEE compliance must also be measured on a company’s latest financial period.
Benefits of a BEE Certificate
One of the main benefits of having a B-BBEE certificate is that companies can conduct business with government sectors in South Africa, including municipalities, as well as public entities.
The certificate allows the company to tender for contracts and increases the chances of winning the contract. There are eight different levels of B-BBEE compliance, with level 1 being the highest and most desirable.
Another advantage is having an increased chance of securing contracts with large companies and big industry names. These larger entities are often encouraged to conduct business with smaller companies who are BEE compliant, and a B-BBEE certificate allows smaller companies to participate as a supplier in lucrative chains of preferential procurement. Another benefit is that a B-BBEE certificate shows a company’s commitment to making a positive difference in South Africa’s society.
Broad-Based Black Economic Empowerment compliance is therefore a key consideration for businesses in order to favourably position growth prospects and be part of transformation.
If you're starting out with a new company, apply now!
https://beecertificatepro.co.za/
