B-BBEE Exempted Micro Enterprise (EME): Everything You Need to Know

Who Qualifies as an EME?

An entity qualifies as an EME if its annual total revenue (turnover) does not exceed R10 million in the financial year being measured. This threshold applies regardless of industry, legal form, or number of employees. The threshold has not been adjusted since the Amended Codes took effect in 2015 and remains at R10 million as of 2024.

Any legal form of entity qualifies: sole proprietors, close corporations, private companies, partnerships, trusts, and co-operatives. Non-profit organisations that earn revenue from trading activities must also apply the threshold to their trading income.

Automatic B-BBEE Levels for EMEs

The automatic B-BBEE level assigned to an EME depends on its ownership structure:

• Standard EME (any ownership): automatic Level 4 — 100% recognition
• EME with more than 51% black ownership: automatic Level 1 — 135% recognition
• EME with more than 30% black women ownership: automatic Level 2 — 125% recognition
• If the EME is more than 51% black-owned AND more than 30% black women-owned, it qualifies for Level 1

The Affidavit: What It Must Contain

An EME must confirm its status through a sworn affidavit. The affidavit does not require a Commissioner of Oaths fee at most banks and police stations. The affidavit must contain:

• The entity's full legal name and registration/ID number
• The financial year end date
• Total annual turnover for the financial year (from annual financial statements or management accounts)
• The percentage of black ownership (stating whether >51% black-owned or >30% black women-owned)
• The declarant's full name, identity number, and capacity (e.g., director, sole proprietor)
• Date and place of signing
• Commissioner of Oaths signature, stamp, and designation

Validity and Annual Renewal

The EME affidavit is valid for one financial year — the year for which the turnover is stated. When the next financial year ends and new accounts are available, a new affidavit must be signed. There is no grace period: you should update your affidavit promptly after your financial year end to avoid gaps in compliance.

If you use management accounts to estimate turnover mid-year, note that the affidavit should reflect actual financial year figures. Some buyers accept management account-based affidavits provisionally, pending final statements.

Implications of Growing Beyond the EME Threshold

Once an entity's turnover exceeds R10 million, it moves into the QSE category and can no longer use the automatic EME status. At this point, the entity must either commission a formal verification by a SANAS-accredited agency or — if 100% black-owned — still qualify for an automatic Level 1 QSE status via affidavit.

Planning ahead is important: a business approaching the R10 million threshold should begin considering its scorecard strategy, particularly on the ESD (Preferential Procurement) and Skills Development elements, well before it is required to undergo full verification.

Frequently Asked Questions

Related Guides

• Full Affidavit Guide
• QSE Guide
• B-BBEE Levels