Navigating the Legal Sector Charter: What Law Firms Need to Know About B-BBEE Measurement
South Africa’s legal profession is entering a new era of accountability and transformation. The Legal Sector Charter (LSC), issued by
Expert guidance, strategic advice, and best practices from B-BBEE professionals on the latest developments and their impact on your business.
Expert guidance, strategic advice, and best practices from B-BBEE professionals on the latest developments and their impact on your business.
What is Broad-Based Black Economic Empowerment
Broad-Based Black Economic Empowerment (BBBEE) is the South African government's policy to encourage black participation in the economy to redress historical inequality in the country. Businesses trading in South Africa are assessed according to their size and sector.
Benefits of being verified?
A B-BBEE certificate is a recognized and verifiable summary of the human and developmental aspects of your business. It demonstrates your alignment with South Africa’s broader economic transformation goals. Having a valid B-BBEE certificate can enhance your company’s reputation and strengthen public trust, increasing your social capital. This, in turn, improves your competitiveness when securing both private and public sector contracts. A B-BBEE certificate can only be issued by a SANAS-accredited B-BBEE verification agency.
Advantages of BBBEE
The decision to embrace BBBEE carries several advantages for South African businesses. While participation is voluntary, the benefits can improve a company’s annual turnover and opportunities within the broader economic landscape. Notable BBBEE advantages include:
- Enhanced Contract Opportunities: A BEE scorecard with more points increases the likelihood of securing government tenders and private sector contracts.
- Skills Development: BBBEE promotes learning across formal, non-formal, and on-the-job settings.
- Workplace Diversity: Employment Equity practices ensure fair representation of historically marginalised groups.
- Preferential Procurement: BBBEE encourages support for local black-owned suppliers, driving economic growth within communities.
- Enterprise Development: Investment in black-owned businesses leads to job creation and economic growth.
Why do I need to be rated if my business is black-owned?
A SANAS-accredited B-BBEE certificate provides accurate, verifiable, and recognized proof that your business is fully black-owned and actively contributing to South Africa’s economic transformation through its empowerment efforts. Fantastic opportunities exist for businesses that support transformation. A B-BBEE certificate shows that your company is implementing initiatives that positively impact not only your own enterprise but also the broader South African economy. These may include:
- Appointing women of colour across your management structure;
- Offering training programmes to develop employee skills;
- Adopting supply chain practices that support black-owned small and medium enterprises; and
- Driving social development initiatives that promote inclusive growth and social awareness.
Unfortunately, some companies use misleading brand names to secure business in the marketplace. This is one of the main reasons why all companies should verify their black ownership through a valid B-BBEE certificate. Verification ensures that businesses are not engaging in fronting practices — which is a criminal offence under the B-BBEE Act — and that all empowerment initiatives promoting economic inclusivity are legitimate and transparent.
Who qualifies as Black for BBBEE.
In terms of South Africa’s B-BBEE legislation, a person is considered Black if they are an African, Coloured, or Indian South African citizen. This includes individuals who were citizens by birth, descent, or naturalisation, and who were historically disadvantaged under apartheid laws. Only Black South Africans qualify for B-BBEE recognition, as the framework is designed to promote economic participation and empowerment for those previously excluded from the mainstream economy.
Do Exempted Micro Enterprises (EMEs) need to be rated?
Most Exempted Micro Enterprises (EMEs) automatically qualify for a B-BBEE level without undergoing a formal verification process. This is done by completing the DTI’s EME affidavit, which serves as proof of compliance.
The B-BBEE status level is determined by the percentage of black ownership and the applicable sector code.
However, there are exceptions — EMEs operating within the Transport (including Road Freight, Maritime, Logistics, and Forwarding & Clearing) and Construction sectors must undergo a full verification with a SANAS-accredited B-BBEE rating agency. Their B-BBEE status must be verified and confirmed by that agency.
An EME may also choose to undergo a SANAS-accredited verification using the QSE scorecard to improve its B-BBEE level and demonstrate a higher level of compliance. In such cases, the enterprise will be issued a B-BBEE Certificate instead of relying solely on the affidavit.
The 5 Elements of B-BBEE
B-BBEE compliance is measured through five key elements that together make up your company’s scorecard. Each element reflects how your business contributes to South Africa’s transformation goals.
- Ownership - Assesses the level of black ownership and voting rights in your business, as well as the value and structure of shareholding.
- Management Control - Evaluates black representation in executive, senior, and operational management positions, showing who influences key business decisions.
- Skills Development - Measures your investment in developing black employees through training, learnerships, and career growth programmes.
- Enterprise & Supplier Development - Assesses how your company supports black-owned suppliers and small businesses through procurement and development initiatives.
- Socio-Economic Development - Recognises your contribution to long-term community and social development projects that create sustainable economic participation.
How often does my business need to be rated?
The B-BBEE certificate is valid for one year only and is therefore due for renewal on a yearly basis.
What is Broad-Based Black Economic Empowerment
Broad-Based Black Economic Empowerment (BBBEE) is the South African government's policy to encourage black participation in the economy to redress historical inequality in the country. Businesses trading in South Africa are assessed according to their size and sector.
Benefits of being verified?
A B-BBEE certificate is a recognized and verifiable summary of the human and developmental aspects of your business. It demonstrates your alignment with South Africa’s broader economic transformation goals. Having a valid B-BBEE certificate can enhance your company’s reputation and strengthen public trust, increasing your social capital. This, in turn, improves your competitiveness when securing both private and public sector contracts. A B-BBEE certificate can only be issued by a SANAS-accredited B-BBEE verification agency.
Advantages of BBBEE
The decision to embrace BBBEE carries several advantages for South African businesses. While participation is voluntary, the benefits can improve a company’s annual turnover and opportunities within the broader economic landscape. Notable BBBEE advantages include:
- Enhanced Contract Opportunities: A BEE scorecard with more points increases the likelihood of securing government tenders and private sector contracts.
- Skills Development: BBBEE promotes learning across formal, non-formal, and on-the-job settings.
- Workplace Diversity: Employment Equity practices ensure fair representation of historically marginalised groups.
- Preferential Procurement: BBBEE encourages support for local black-owned suppliers, driving economic growth within communities.
- Enterprise Development: Investment in black-owned businesses leads to job creation and economic growth.
Why do I need to be rated if my business is black-owned?
A SANAS-accredited B-BBEE certificate provides accurate, verifiable, and recognized proof that your business is fully black-owned and actively contributing to South Africa’s economic transformation through its empowerment efforts. Fantastic opportunities exist for businesses that support transformation. A B-BBEE certificate shows that your company is implementing initiatives that positively impact not only your own enterprise but also the broader South African economy. These may include:
- Appointing women of colour across your management structure;
- Offering training programmes to develop employee skills;
- · Adopting supply chain practices that support black-owned small and medium enterprises; and
- Driving social development initiatives that promote inclusive growth and social awareness.
Unfortunately, some companies use misleading brand names to secure business in the marketplace. This is one of the main reasons why all companies should verify their black ownership through a valid B-BBEE certificate. Verification ensures that businesses are not engaging in fronting practices — which is a criminal offence under the B-BBEE Act — and that all empowerment initiatives promoting economic inclusivity are legitimate and transparent.
Who qualifies as Black for BBBEE.
In terms of South Africa’s B-BBEE legislation, a person is considered Black if they are an African, Coloured, or Indian South African citizen. This includes individuals who were citizens by birth, descent, or naturalisation, and who were historically disadvantaged under apartheid laws. Only Black South Africans qualify for B-BBEE recognition, as the framework is designed to promote economic participation and empowerment for those previously excluded from the mainstream economy.
Do Exempted Micro Enterprises (EMEs) need to be rated?
Most Exempted Micro Enterprises (EMEs) automatically qualify for a B-BBEE level without undergoing a formal verification process. This is done by completing the DTI’s EME affidavit, which serves as proof of compliance.
The B-BBEE status level is determined by the percentage of black ownership and the applicable sector code.
However, there are exceptions — EMEs operating within the Transport (including Road Freight, Maritime, Logistics, and Forwarding & Clearing) and Construction sectors must undergo a full verification with a SANAS-accredited B-BBEE rating agency. Their B-BBEE status must be verified and confirmed by that agency.
An EME may also choose to undergo a SANAS-accredited verification using the QSE scorecard to improve its B-BBEE level and demonstrate a higher level of compliance. In such cases, the enterprise will be issued a B-BBEE Certificate instead of relying solely on the affidavit.
What are the 5 Elements of BBBEE?
B-BBEE compliance is measured through five key elements that together make up your company’s scorecard. Each element reflects how your business contributes to South Africa’s transformation goals.
- Ownership - Assesses the level of black ownership and voting rights in your business, as well as the value and structure of shareholding.
- Management Control - Evaluates black representation in executive, senior, and operational management positions, showing who influences key business decisions.
- Skills Development - Measures your investment in developing black employees through training, learnerships, and career growth programmes.
- Enterprise & Supplier Development - Assesses how your company supports black-owned suppliers and small businesses through procurement and development initiatives.
- Socio-Economic Development - Recognises your contribution to long-term community and social development projects that create sustainable economic participation.
Each element carries a specific weighting that contributes to your overall B-BBEE score and level. Your score determines your B-BBEE Level (1 to 8) — the higher your score, the stronger your compliance and competitiveness in both public and private sector opportunities.
How often does my business need to be rated?
The B-BBEE certificate is valid for one year only and is therefore due for renewal on a yearly basis.
Browse our range of frequently asked questions pertaining to B-BBEE verification and certification.
As B-BBEE verification experts, our experience has shown that high costs of proving compliance make it more difficult for clients to maintain their compliance status.
The B-BBEE certificate that you would receive at the end of the B-BBEE verification process is only valid for one year, thus you would need to complete the B-BBEE verification process once every 12 months.
The South African National Accreditation System (SANAS) is the institution responsible for the development and maintenance of the rating standards in terms of the B-BBEE legislative framework.
SANAS is responsible for assessing and accrediting B-BBEE verification service providers – such as Vision Verification – on behalf of the Department of Trade, Industry and Competition.
Vision Verification is a B-BBEE verification agency that has been accredited by SANAS to issue your B-BBEE certificate at the end of our four phase B-BBEE verification process.
A B-BBEE certificate – received at the end of the B-BBEE verification process – is a recognisable and verifiable overview of your enterprise. It demonstrates your businesses alignment with the objectives stipulated in the B-BBEE Act and compliance with the Codes of Good Practice.
The B-BBEE verification process and the receival of your B-BBEE certificate enhances your competitiveness to secure both private and public sector contracts. It can also help to improve public support and goodwill of your brand and business which in turn will increase the social capital of your business. A B-BBEE certificate can only be obtained through a B-BBEE verification process that is done by a SANAS accredited B-BBEE verification agency.
B-BBEE verification looks at what has happened to date within your business and determines your B-BBEE status. B-BBEE consulting looks at what should happen next within your business.
B-BBEE verification is an assessment of the B-BBEE compliance that is made following your B-BBEE scorecard. During the B-BBEE verification process, we review your submissions and determine the points awarded to the efforts performed during the measurement period stipulated.
A B-BBEE consultation or consulting process then entails a review of your B-BBEE status and thereafter assists your business in improving its B-BBEE rating level. This involves assistance with the implementation of acceptable initiatives to improve your B-BBEE status.
Fronting refers to any act that undermines or frustrates the objectives of the Act or its implementation. Just like that of bribery and corruption, fronting practices always involve two or more parties,
A common fronting practice includes instances where a black person is given a title within a business or corporate but does not get the powers associated with said title.
There are two types of fronting offenders: those who conduct the fronting activities themselves and those who know of the fronting and fail to report it. Liability will also fall on persons who neglected to apply their mind to the true nature of the scenarios and unintentionally assisted the fronting activities.
It is imperative that all B-BBEE verification agents, officers and state officials understand that if they become aware of any fronting or attempted fronting, they are obligated to report it.
How does someone get convicted of fronting?
Only a court of law can convict someone of fronting. There would need to be a complaint submitted to the B-BBEE commission in order for the commission to then investigate the matter and refer the case to the NPA for prosecution.
The B-BBEE commission does not have the powers to convict, however, it does have significant powers to investigate fronting – including summoning witnesses and evidence. In addition to its investigative powers, the B-BBEE commission can further refer their findings onwards to SARS (the South African Revenue Service), SAPS (the South African Police Service), and the NPA (the National Prosecuting Authority) for further legal redress.
Anyone can lay a complaint or even prepare a report for an investigation into the potential fronting. Verification agencies and procurement officers on the other hand, have a legislative duty in terms of the Act to report fronting.
Anyone found guilty of fronting can be sent to prison and be fined. A prison sentence can be issued for up to ten years and there is no limit to the fine they may receive.
Companies involved in fronting may be fined up to 10% of their annual turnover.
Verification agents, procurement officers and public servants who fail to report fronting may face both prison and a fine. Said prison sentence can be for up to one year and there is no limit to the fine that they receive.
Further to the above, the guilty party will not be able to deal with the government and Organs of State for a period of ten years from conviction. This ban on public sector businesses extends to both the shareholders and directors of the convicted business.
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Here’s how we can help you
Vision Verification is prepared to help you take the next step towards economic empowerment with B-BBEE verification. We can assist with;
- Verify the status of your enterprise
- The legal framework of economic empowerment, including the B-BBEE codes of good practice
- The scorecards that are relevant to your sector
- Preparing your portfolio of evidence
- Introducing transformation and change management
- B-BBEE Training
- Consolidated B-BBEE certificates
- B-BBEE advisory services
Here’s how we can help you
Vision Verification is prepared to help you take the next step towards economic empowerment with B-BBEE verification. We can assist with;
- Verify the status of your enterprise
- The legal framework of economic empowerment, including the B-BBEE codes of good practice
- The scorecards that are relevant to your sector
- Preparing your portfolio of evidence
- Introducing transformation and change management
- B-BBEE Training
- Consolidated B-BBEE certificates
- B-BBEE advisory services
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