What B-BBEE is
Broad-Based Black Economic Empowerment is a statutory transformation framework. The Broad-Based Black Economic Empowerment Act 53 of 2003 sets the objectives; the Codes of Good Practice turn them into a measurable scorecard.
“The objectives of this Act are to facilitate broad-based black economic empowerment by— (a) promoting economic transformation in order to enable meaningful participation of black people in the economy; (b) achieving a substantial change in the racial composition of ownership and management structures and in the skilled occupations of existing and new enterprises; … (g) promoting access to finance for black start-ups, small, medium and micro enterprises, co-operatives and black entrepreneurs…”
For most businesses B-BBEE is not a criminal-law duty — no statute forces a private company to hold a rating. It is a commercialcompliance reality: organs of state, and many private buyers, require a B-BBEE certificate or affidavit before they will contract with you, and your level feeds their own procurement scorecards.
Heads-up on pending changes (current as at June 2026). This page states the position under the 2013 Amended Codes of Good Practice. In January 2026 the dtic gazetted draft amendments to several Codes (Government Gazette 54032 — including a proposed Transformation Fund and a revised Enterprise & Supplier Development scorecard); public comment closed on 30 March 2026 and they are not yet in force. We will update this guide when they are finalised.
EME, QSE and generic: which are you?
Under the generic Codes of Good Practice, your measurement category depends on annual total revenue:
- EME (Exempted Micro Enterprise) — revenue of R10 million or less. Automatically Level 4; Level 2 if at least 51% black-owned; Level 1 if 100% black-owned. Proves status by sworn affidavit.
- QSE (Qualifying Small Enterprise) — revenue of more than R10 million and up to R50 million. Affidavit if at least 51% black-owned; otherwise measured on the QSE scorecard and verified.
- Generic enterprise — revenue of more than R50 million. Measured on the full generic scorecard and verified by a SANAS-accredited agency.
New businesses. A start-up is measured as an EME in its first year after formation, whatever its expected turnover — so it begins at least at Level 4 on an affidavit. The exception is tendering: for a contract worth more than R10 million it must use the QSE scorecard, and for R50 million or more, the generic scorecard.
Watch the sector codes. Many industries — construction, ICT, tourism, property, agriculture (AgriBEE), financial services and others — have their own gazetted sector codes that replace the generic Codes for businesses in that sector, often with different thresholds, weightings and priority elements. If a sector code applies to you, it governs. (The EME threshold above is the generic one, quoted verbatim in the dtic’s official affidavit: “R10,000,000.00 (Ten Million Rands) or less”.)
The five-element scorecard
Companies measured on a scorecard (generic, and QSEs that are not affidavit-eligible) are scored on five elements:
- Ownership — black ownership of the enterprise. For how the 25 ownership points actually work — votes, economic interest and net value — and the lawful ways to structure black ownership, see our B-BBEE ownership structuring hub.
- Management Control — black representation at board and management level.
- Skills Development — investment in training black employees.
- Enterprise & Supplier Development — procurement from and support of black-owned suppliers and small businesses.
- Socio-Economic Development — contributions to community upliftment.
Some of these are priority elements: you must score at least a floor — broadly 40% of that element’s available points — on each, or your overall B-BBEE level is discounted by one level (the “discounting principle”). For a Generic enterprise the priority elements are Ownership, Skills Development and Enterprise & Supplier Development; for a QSE, Ownership is the only compulsory priority element, but a QSE must still meet the sub-minimum on at least one of Skills Development or Enterprise & Supplier Development. The Codes are issued under section 9 of the Act.
“In order to promote the purposes of the Act, the Minister may by notice in the Gazette issue codes of good practice on black economic empowerment that may include— (a) the further interpretation and definition of broad-based black economic empowerment…; (b) qualification criteria for preferential purposes for procurement and other economic activities; (c) indicators to measure broad-based black economic empowerment; (d) the weighting to be attached to broad-based black economic empowerment indicators…”
Your total points convert into a status level — and a “recognition level” that your customers multiply their spend with you by when they work out their own procurement score (generic scorecard):
| B-BBEE status | Generic points | Procurement recognition |
|---|---|---|
| Level 1 | ≥ 100 | 135% |
| Level 2 | ≥ 95 | 125% |
| Level 3 | ≥ 90 | 110% |
| Level 4 | ≥ 80 | 100% |
| Level 5 | ≥ 75 | 80% |
| Level 6 | ≥ 70 | 60% |
| Level 7 | ≥ 55 | 50% |
| Level 8 | ≥ 40 | 10% |
| Non-compliant | < 40 | 0% |
That multiplier is why a strong level wins work: R1 million of spend with a Level 1 supplier counts as R1.35 million on the customer’s B-BBEE scorecard, while the same spend with a non-compliant supplier counts as nothing.
Affidavits and certificates
How you prove your status depends on your category. EMEs — and QSEs that are at least 51% black-owned — complete a sworn affidavit on the dtic template, confirming turnover and black-ownership percentage, signed before a commissioner of oaths. Everyone else is verified by a SANAS-accredited verification agency, which issues a B-BBEE certificate. Either way, the document is valid for 12 months and must be renewed annually. Knowingly overstating turnover or ownership on an affidavit to qualify for a better level is itself an offence under section 13O (below) — and, because the affidavit is sworn, potentially perjury. The commissioner of oaths before whom it is signed must be independent of the enterprise.
Fronting: the criminal offence
The 2013 amendments criminalised “fronting” — arrangements that fake empowerment without delivering it.
“‘fronting practice’ means a transaction, arrangement or other act or conduct that directly or indirectly undermines or frustrates the achievement of the objectives of this Act or the implementation of any of the provisions of this Act, including but not limited to practices in connection with a B-BBEE initiative— (a) in terms of which black persons who are appointed to an enterprise are discouraged or inhibited from substantially participating in the core activities of that enterprise; …”
The offence and its penalty are in section 13O:
“(1) A person commits an offence if that person knowingly— (a) misrepresents or attempts to misrepresent the broad-based black economic empowerment status of an enterprise; … or (d) engages in a fronting practice. … (3) Any person convicted of an offence in terms of this Act, is liable— (a) in the case of a contravention of subsection (1), to a fine or to imprisonment for a period not exceeding 10 years or to both a fine and such imprisonment or, if the convicted person is not a natural person, to a fine not exceeding 10 per cent of its annual turnover”.
So an individual faces up to ten years’ imprisonment and/or a fine; a company faces a fine of up to 10% of its annual turnover. On top of that, section 13P bans a convicted person from contracting with any organ of state for ten years and enters them in the register of tender defaulters.
Fronting is the single biggest B-BBEE legal risk — and it is a structuring problem, not a paperwork one. The only real protection is genuine empowerment: real black ownership and participation, properly documented, that delivers the economic benefits the Act requires and stands up to a Commission investigation. We design and document empowerment structures — through trusts, employee-ownership schemes and shareholders’ agreements — that achieve real transformation and withstand scrutiny, so the affidavit you sign is one you can stand behind. Because ownership verification also feeds anti-money-laundering checks, this dovetails with FICA and beneficial-ownership compliance.
The B-BBEE Commission
The B-BBEE Commission, established by section 13B of the Act, oversees and enforces B-BBEE: it receives complaints, investigates fronting and misrepresentation, maintains a registry of major B-BBEE transactions, and refers offences for prosecution. For a broader explainer of how empowerment fits the corporate-law picture, see our B-BBEE insight, and for the company-law duties that run alongside it, Companies Act compliance.