Exempted Micro Enterprises

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All enterprises must be Broad-Based Black Economic Empowerment(B-BBEE) compliant; this means that all enterprises must submit annual Employment Equity Reports.

What is an Exempted Micro Enterprise?

All state-owned, public and private organisations must adhere to B-BBEE, except if the organisations are classified as Exempted Micro Enterprises (EMEs). EMEs are businesses which have an annual turnover of ten million rand or less. Businesses that are less than a year old are also exempt from being measured according to a B-BBEE scorecard – in this way they can manage a start-up year without hassle.

New businesses need not be compliant because of all the other elements involved in starting a new – and successful– business. By having a year’s breather, businesses may be pushed into the Good Practice bracket (businesses that must be B-BBEE compliant) after that year. During a start-up’sfirst year it is considered an EME regardless of the expected turnover. But if the business achieves a turnover of more than ten million rand by the next year, it is required to submit a B-BBEE scorecard.

Should you qualify as an EME you must provide evidence thereof in the form of a certificate from an auditor, an accounting officer or a verification agency. Fronting – claiming to be B-BBEE compliant when you are not – is a criminal offence. Businesses can face a fine of 10 per cent of their annual turnover or for business owners, it can mean up to a decade in prison.

What is an Empowering Supplier?

An Empowering Supplier is a trusted local supplier that other good practice or B-BBEE compliant companies can work with to increase their B-BBEE scorecard points. EMEs qualify as Empowering Suppliers. This is a means of contributing to B-BBEE while being registered as an EME.

Enterprise Development along with Supplier Development contributes to 40 per cent of a business’s overall B-BBEE score.

Assistance with compliance orders

If you require assistance with submitting reports or registering for a B-BBEE scorecard there are services to help you do so. Consult a trusted company today to get all your affairs in order and be a good practice company.