The Act is a legislative framework for the promotion of Black Economic Empowerment and to empower the Minister at the Department of Trade and Industry (DTIC) to issue Codes of Good practice and to publish relevant transformation charters that governs the principles and requirements of Black Economic Empowerment.  

The Act aims to promote the right of equality and increase participation of black people in the economy that will allow for economic growth and increased employment with more equitable income distribution.

The term “black people” is a generic term which means Africans, Coloureds, and Indians—

(a) who are citizens of the Republic of South Africa by birth or descent, Or

(b) who became citizens of the Republic of South Africa by Naturalisation —

(i) before 27 April 1994; or

(ii) on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalisation prior to that date.

The following Entities are measurable under the Codes:

• all Organs of State and Public Entities.
• all Measured Entities that undertake any economic activity with all Organs of State and Public Entities.
• any other Entity that undertakes any economic activity, whether direct or indirect, with any Entity that is subject to measurement under the Codes.

B-BBEE classify entities based on annual turnover, namely:

• Start-up Enterprise. This is a recently formed or incorporated entity that has been in operation for less than one (1) year. A start-up enterprise does not include any newly constituted enterprise which is merely a continuation of a pre-existing enterprise;
• Exempted Micro-Enterprises (EMEs). This are entities that generate an annual turnover of R0 and less R10 million.
• Qualifying Small Enterprises (QSEs). These entities have an annual turnover of above R10 million and less R50 million.
• Large Enterprises are entities with an annual turnover of above R50 million.

Note: some sector charters have different turnover brackets for classification.

EMEs:

• All EMEs are exempted from B-BBEE compliance and receive automatic B-BBEE Recognition Level 4.
• An EME, which is at least 51% black, owned automatically receive level 2 status and those which are 100% black owned receive level 1.
• EMEs only have to obtain a sworn affidavit or CIPC certificate.
• The sworn affidavit must be signed by a Commissioners of Oaths.

QSEs:

• QSEs which are at least 51% black owned or 100% black owned are treated the same as EMEs, they receive automatic B-BBEE Recognition Levels 2 and 1 and only have to obtain a sworn affidavit.
• The rest of the QSEs (less 51% black shareholding) must be verified through an accredited verification professional.

Large Enterprises:

• Large companies must be verified by an accredited verification agency.

An EME that intends to enhance its B-BBEE status must be verified against the QSE scorecard.

B-BBEE Consultants assist agencies in strategic planning and implementation of the requirements set out in the BEE codes. Due to impartiality requirements B-BBEE Consultants must be independent from the B-BBEE Verification Agency issuing the Certificate.

A B-BBEE certificate can only be issued by an accredited Verification Agency who is authorised by the South Africa National Accreditation Systems (SANAS) to issue a B-BBEE Certificate.

A B-BBEE certificate issued by an accredited Verification Agency is valid for one year from date of issue of the certificate.