BEE Dictionary

30% black female owned

Where black women hold 30% or more of the voting rights and economic interest and have earned all the points for Net Value

50% black owned

Where black people hold 50% or more of the voting rights and economic interest and have earned all the points for Net Value.


Adult basic education and training as determined by the national qualifications authority.

Accreditation body

The South African national accreditation system or any other entity appointed by the minister from time to time.
(a) Accrediting verification agencies; and
(b) Developing, maintaining and enforcing the verification standards;

Acquisition debt

The debts of:
(a) Black participants incurred in financing their purchase of their equity instruments in the measured entity; and
(b) Juristic persons or trusts found in the chain of ownership between the eventual black participants and the measured entity but excluding debts incurred by the measured entity for the same purpose as those in (a).

Approved socio-economic development contributions

Monetary or non-monetary contributions carried out for the benefit of any projects approved for this purpose by any organ of state or sectors including without limitation:
(a) Projects focusing on environmental conservation, awareness, education and waste management; and
(b) Projects targeting infrastructural development, enterprise creation or reconstruction in underdeveloped areas; rural communities or geographic areas identified in the government’s integrated sustainable rural development or urban renewal programmes

Associated enterprise

An entity with which a seller has concluded a qualifying transaction;

B-BBEE Codes

The Codes of Good Practice on Broad-Based Black Economic Empowerment gazetted on 9 February 2007 as part of the Broad-Based Black Economic Empowerment Act, Act No. 53 of 2003 and any amendments thereto.

B-BBEE Verification Engagement

A B-BBEE Verification Engagement is an engagement performed to verify the score awarded to a measured entity in respect of the individual scorecard elements based on the B-BBEE Codes of Good Practice and the overall rating (B-BBEE Status) awarded. A verification engagement reduces the risk of misstatement for individual scorecard elements to an acceptably low level in the circumstances of the engagement, as the basis for a positive form of expression of the Verification Agency’s conclusion. An acceptably low level of risk is achieved if a reasonable person with sufficient knowledge of the Codes will be able to arrive at the similar conclusion based on the same set of information.

BEE Level

The status given to an organisation dependent on their BEE Score. Levels range from 8, which is the lowest through to 1 which is the highest.

BEE Procurement Spend

The amount calculated by multiplying total spend with a specific supplier by their BEE Recognition Level as illustrated in the example above.

BEE Recognition Level

The amount a customer may multiply their total spend by with a specific supplier to arrive at the BEE spend for that supplier.

BEE Score

The total number of points a company secures on a BEE Scorecard.

Benefit factor

A factor specified in the benefit factor matrix applicable to fixing the monetary value of enterprise development and socioeconomic development contributions claimable under statement 600, 700, 806 and 807;

Benefit factor matrix

The benefit factor matrix for enterprise development and socioeconomic development contributions annexed to statement 600, 700, 806 and 807;

Black Designated Groups

  • Black unemployed people
  • Black youth (under 35)
  • Black disabled
  • Black people living in rural or under-developed areas

Black New entrant

Black participants who hold rights of ownership in a measured entity and who, before holding the equity instrument in the measured entity, have not held equity instruments in any other entity which has a total value of more than R20 000 000.00 (R20-million), measured using a standard valuation method;

Black people

Has the meaning defined in the act qualified as including only natural persons who are citizens of the Republic of South Africa by birth or descent; or are citizens of the Republic of South Africa by naturalisation:
(a) Occurring before the commencement date of the constitution of the Republic of South Africa Act of 1993; or
(b) Occurring after the commencement date of the constitution of the Republic of South Africa Act of 1993, but who, without the apartheid policy would have qualified for naturalisation before then

Black professional service provider

Black individuals who provide services of a professional nature;

Broad-based ownership scheme

An ownership scheme which meets the rules set out in annexure 100B

Broad-based Ownership Schemes

A scheme where at least 85% of the benefits must flow to black people, where at least half of the controlling body must comprise of black people and at least 25% should be black women. At least half of the controlling body should be independent, receiving no benefit from the scheme.

Category A

EMEs or QSEs that are 50% black owned.

Category B

Any other entity that is 50% black owned, or 25% black owned so long as they have achieved a BEE level between 1 and 6.

Certified learning programme

Any learning programme for which the measured entity has:
(a) Any form of independent written certification as referred to in the “learning achievements” column of the learning programmes matrix; or if it does not have such certification;
(b) An enrolment certificate issued by the independent person responsible for the issue of the certification referred to in statement 400 and 804 confirming the employee has:
(i) Enrolled for, is attending and is making satisfactory progress in the learning programme;
(ii) Enrolled for but not attended the learning; or
(iii) Attended the training programme but has failed an evaluation of their learning progress;

Company limited by guarantee

Means a company as referred to in section 19(1)b of the Companies Act;

Competent person

Means a person who has acquired through training, qualification and experience the knowledge and skills necessary for undertaking any task assigned to them under the codes;


As defined in the Co-operatives Act.

Core skills

Skills that are:
(a) Value-adding to the activities of the measured entity in line with its core business;
(b) In areas the measured entity cannot outsource; or
(c) Within the production/operational part of the measured entity’s value-chain; as opposed to the supply side; services or downstream operations;

Disabled Employees

Besides obvious disabilities such as being blind, deaf or paraplegic, this includes any employee who has a physical or mental impediment that requires the organisation to make special accommodation for their disability (Refer to Section 54 of Employment Equity Act)


Economically active population as determined and published by Stats SA. The operative economically active population for the purposes of any calculation under the codes will be the most recently published economically active population;

Economic Interest

The right to benefits associated with shareholding – usually a dividend.

EE Act

Employment Equity Act of 1998, as amended;


The measurable quantitative or qualitative elements of BEE compliance in the generic scorecard and the primary codes


Exempt Micro Enterprise (R0m to R10m turnover per annum)

Employee Ownership Schemes

Schemes that allow employees to participate in shareholding (the scheme must hold shares, profit-sharing on its own is not included).

Enterprise Development Beneficiaries

The provision of support by your organisation to a company that qualifies as a beneficiary.

Enterprise development contributions

Monetary or non-monetary contributions carried out for the following beneficiaries, with the objective of contributing to the development, sustainability and financial and operational independence of those beneficiaries:
(a) Category A enterprise development contributions involves enterprise development contributions to exempted micro-enterprises or qualifying small enterprises which are 50% black-owned or black-women owned;
(b) Category B enterprise development contributions involves enterprise development contributions to any other entity that is 50% black-owned or black-women owned; or 25% black-owned or black-women owned with a BEE status of between level one (1) and level six (6);


A person who starts and/or operates a business which includes identifying opportunities in the market, taking risks with a view of being rewarded with profits;

Equity equivalent programme

A public programme or scheme of any government department, provincial or local government in the republic of South Africa or any other programme approved by the minister as an equity-equivalent programme

Equity instrument

The instrument by which a participant holds rights of ownership in an enterprise

Equity-equivalent contribution

An equity-equivalent contribution made by a multinational under an equity equivalent programme

Equivalency percentage

A percentage ownership performance for all the indicators in the associated enterprise’s ownership scorecard arising from a qualifying transaction included in the ownership scorecard of the beneficiary entity;

Executive Director

A board member who also serves a day-to-day executive management role in the enterprise.

Global practice

A globally and uniformly applied practice of a multinational, restricting alienation of equity in or the sale of businesses in its regional operations. The practice must have existed before the promulgation of the act;

Higher education institution

A higher education institution as defined under the Higher Education Act of 1997

Indicator percentage

The percentage compliance of the associated entity for all the indicators of the associated enterprises ownership scorecard. The calculation of indicator percentages follows the rules in statement 100 using the actual percentage compliance for each indicator and not the resulting scores

Junior Management

This level includes skilled technical and academically qualified workers, junior managers, supervisors, foremen, and superintendents.

King report

The Kings Report on Corporate Governance for South Africa by the King Committee on Corporate Governance of the Institute of Directors in South Africa;

Learning programmes

Any learning programme set out in the learning programme matrix

Leviable Amount

The amount on which the Skills Development Levy is calculated. Roughly speaking this is the total salary and wage bill.

Management fees

The total economic interest received by a broad-base ownership scheme in any year less the amounts distributed or applied to beneficiaries and the amounts reserved for future distribution or application

Mandated investments

Any investments made by or through any third party regulated by legislation on behalf of the actual owner of the funds, pursuant to a mandate given by the owner to a third party, which mandate is governed by that legislation. Some examples of domestic mandated investments and the portions of those investments subject to the exclusion principle are contained in annexure 100A attached to statement 100;

Measured entity

An entity as well as an organ of state or public entity subject to measurement under the codes;

Middle Management

Apart from managers who report to the Senior Managers, this level also includes professionally qualified people and experienced specialists.

Multinational business

A measured entity with a business in the Republic of South Africa and elsewhere which maintains its international headquarters outside the republic;

National skills development strategy

National skills development strategy referred to in section 5(1)(a)(ii) of the Skills Development Act;

Net profit after tax

The operating profit of a measured entity after tax. It incorporates both the equity/loss figures and abnormal items, but excludes extra ordinary items as determined by Generally Accepted Accounting Practices (GAAP);

Net profit before tax

The operating profit of a measured entity before tax. It incorporates both the equity/loss figures and abnormal items, but excludes extra ordinary items as determined by Generally Accepted Accounting Practices (GAAP);

Net Value

The difference between the value of the shares and the value of any liability incurred to purchase them.

Net Value Non-executive Director

A board member who does not have any day-to-day management role in the business. Non-executive directors usually only attend board meetings and are paid directors’ fees, not a monthly salary.


Net Profit After Tax

Other Top Management

Individuals appointed by the board or members of the board, who have responsibility for specific divisions of the business. This could include positions such as marketing director, human resource director, IT director and commercial director.

Outsourced labour expenditure

Means any expenditure incurred in:
(a) Procuring the series of or from a labour broker; and
(b) Procuring the services of any person who receives any remuneration or to whom any remuneration accrues because of any services rendered by such person to or on behalf of a labour broker;

Ownership fulfilment

This is achieved when black people hold at least 25% of the shareholding and there are no liabilities associated with the shares.


A natural person holding rights of ownership in a measured entity;


Means the Public Finance Management Act 1 of 1999 as amended;

Priority skills

Means core, critical and scare skills as well as any skills specifically identified:
(a) In a sector skills plan issued by the department of labour of the Republic of South Africa; and
(b) By the Joint Initiative for Priority Skills Acquisition (Jipsa established as part of the Accelerated and Shared Growth Initiative – SA (Asgi-SA);

Private equity fund

Means a third-party fund through which investments are made on behalf of the actual owners of the funds pursuant to a mandate given by that person to the private equity fund;

Public benefit organisation

Means an entity as defined in section 30 of the Income Tax act of 1962;


Qualifying Small Enterprise (R10m to R50m turnover per annum)

Qualifying transaction

A sale of a business, valuable business assets or shares that results in the creation of sustainable business opportunities and transfer of specialised skills or productive capacity for black people

Related enterprise

An entity controlled by a measured entity whether directly or indirectly controlled by the natural persons who have direct or indirect control over that measured entity or the immediate of those natural persons;

Rights of ownership

Is a collective term for the right to economic interest and the right to exercisable voting rights

Scarce skills

Are those skills identified as being scarce by any seta

Section 21 company

An association not for gain incorporated under section 21 of the Companies Act

Sector code

A code in statement 003 which is applicable to a particular sector;

Sector-specific programmes

A sector-specific programmes that are recognised on the bases set forth in the sector code governing them

Senior Management

This is the level below the Top Management / Directors described under the Management Scorecard.

Senior Top Management

Individuals appointed by the board or members of the board, who have responsibility for overall strategy and financial management of the business. Typically this will be one of three positions – Chief Executive Officer, Chief Operating Officer or Chief Financial Officer.

Skills development expenditure

Comprises the money that a measured entity spends on skills development. It excludes the skills development payable by the measured entity under the Skills Development Levies Act;

Socio-economic Development Contribution

A monetary or non-monetary contribution made to black beneficiaries with the specific aim of facilitating sustainable access to the economy. (See below for a list of what can qualify)

Socioeconomic development programmes

Socioeconomic development programmes commonly take the following forms:
(a) Development programmes for women, youth, people with disabilities, people living in rural areas;
(b) Support of healthcare and HIV/AIDS programmes;
(c) Support for education programmes, resources and materials at primarily, secondary and tertiary education level, as well as bursaries and scholarships;
(d) Community training skills development for unemployed people and adult basic education and training; or
(e) Support of arts, cultural or sporting development programmes;

Standard valuation method

Valuation method for an asset, and economic interest, or any other instrument or right relevant to measurement under statement 100, undertaken using normal valuation methods that represent standard market practice;

Start-up enterprise

A recently formed or incorporated entity that has been in operation for less than one year. A start-up enterprise does not include any newly constituted enterprise which merely a continuation of a pre-existing enterprise;

Third party rights

Third party legal or commercial rights that restrict withhold or defer any benefit associated with ownership of any equity Instrument. Third party rights include only those rights:
(a) Created against a black participant to secure, for a lender, repayment of a loan advance dot that participant for financing their purchaser of their equity instrument in the measured entity;
(b) Held against a juristic person or trust that is in the chain of ownership between the measured entity and that the eventual black participant servicing the same purpose mentioned in (a) above;

Total labour cost

The total amount of remuneration paid by an entity to its employees determined using section 3(4) of the Skills Development Levies Act of 1999 and the fourth schedule of the Income Tax Act of 1962;

Total Measured Procurement Spend

The total amount spent in a 12 month period on any goods or services bought from outside the organisation. A list of inclusions and exclusions is given below.

Total revenue

The total income of an entity from its operations as determined under Generally Accepted Accounting Practice;

Transformation charters

The sectoral transformation charters referred to in section 1.2 of the act

Uncertified learning programme

A learning programme of the measured entity that is not a certified learning programme;

Unincorporated joint venture

A joint venture between two or more measured entities effected by agreement without incorporation;

Verification Certificate

B-BBEE Verification Certificate issued by the approved Verification Agency which reflects the overall B-BBEE Status and B-BBEE status of each Scorecard Element verified in respect of the measured entity (refer Appendix 1).

Verification Report

Report issued by the Verification Agency which provides the detailed score of each element reflected in the Verification Certificate and B-BBEE Status awarded to the measured entity.

Voting right

Voting right attaching to an equity instrument owned by or held for a participant measured using the flow-through principle or the control principle;

Voting Rights

The weighting of a director’s vote in board decisions. In some companies each director will have an equal vote, while in others the voting is weighted to represent the shareholding of the shareholders who they represent.

Workplace skills plan

The plan of a measured entity approved by the relevant seta.

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