Last week, we introduced the concept of B-BBEE. In addition, we looked at the foundations or pillars of B-BBEE. Fundamental to this are two terms: Emerging Micro Enterprise (EME) and Qualifying Small Enterprise (QSE).
The Definition of an Exempted Micro Enterprise
An Exempted Micro Enterprise (EME) has an annual turnover of less than R10 million. Alternatively, these entities are recently incorporated. These will also have been operating for less than one year. An EME is not measured on the B-BBEE Scorecard.
Automatic Qualifications of an EME
According to B-BBEE legislation, an EME will automatically receive the following qualifications. This is if they meet the below criteria:
- A 100% black-owned EME qualifies for level one B-BBEE status with a procurement recognition level of 135%.
- EMEs that are 51% or more black owned qualify for level 2 B-BBEE status. They have a procurement recognition level of 125%.
- Other EMEs qualify for a level 4 B-BBEE status. They also qualify for a procurement recognition level of 100%.
What Is A Qualifying Small Enterprise?
A Qualifying Small Enterprise (QSE) is a company that has a turnover of between R10 and R50 million per annum. A QSE has its own scorecard on which it is measured for B-BBEE. The pillars are:
- Management Control,
- Skills Development,
- Enterprise and Supplier Development, and
- Socio-Economic Development.
The following list sets out the points for each of these pillars:
- Ownership is worth 25 points,
- Management control is worth 15 points,
- Skills development is worth 25 points,
- Enterprise Supplier Development is worth 30 points, and
- Socio Economic Development is worth five points.
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