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White-owned business be BEE Complaint

It is entirely a misconception that in order to be BEE compliant a black shareholder needs to be place. While historically the focus of BEE has been on the Ownership element, with the advent of the Codes and Broad-Based BEE or B-BBEE, the Ownership element is just 1 of 7 the BEE elements.

The size of your business will determine the extent to which the Ownership element will be relevant.

If you are an Exempted Micro Enterprise (i.e. an entity with a turnover of below R5 million per annum) then you are exempt from the provisions of BEE, and will deemed to have a Level 4 BEE status, without changing any aspects of your including, including Ownership.

If you are a Qualifying Small Enterprise (i.e. an entity with a turnover of between R5 million – R35 million) then the QSE Scorecard will be applicable. In terms of the QSE Scorecard you may select any 4 of the 7 BEE elements, each of which will count 25 points towards your BEE Scorecard. Accordingly you may validly leave out 3 BEE elements, including the Ownership element, should you so elect, and will still be fully BEE compliant, should you score points under your 4 selected BEE elements.

If you are a Generic Enterprise (i.e. an entity with a turnover of above R35 million per annum) the Generic Scorecard will be applicable. In terms of the Generic Scorecard all 7 of the BEE elements will be used in determining your overall BEE Score, including the Ownership element. The Ownership element counts for 20 out of 100 points. It is not however compulsory to comply with each element, including the ownership element, and therefore should you not wish to secure black shareholding within your business you will simply not earn any points under the Ownership element. Should you score relatively well in relation to the rest of the Scorecard (where the 80 remaining points lie), it is entirely possible to still score well overall and obtain a decent BEE status level.