The Broad-Based Black Economic Empowerment Act (No. 53 of 2003) (henceforth “the Act”) is a central instrument with which the South African government has sought to achieve economic transformation in South Africa. The primary aim of the old Act is, inter alia, to reduce inequality in South Africa by increasing the economic participation of Black people in the South African economy.
The Act has seven codes (henceforth “the old codes”) with which companies operating in South Africa, be it public or private, need to be in compliance – namely: Ownership (O); Management Control (MC); Employment Equity (EE); Skills Development (SD); Preferential Procurement (PP); Enterprise Development (ED) and Socio-Economic Development (SED).
The old codes draws a distinction between three types of companies, that is; those which make a turnover of between R0 to R5 million (Exempted Micro-Enterprises), those which make a turnover of between R5 to R35 (Qualifying Small Enterprises) and those which make a turnover of R35 million and above (Generic). Continue reading