Frequently Asked Questions
B-BBEE
What is B-BBEE?
Do I need to be B-BBEE compliant?
What is the difference between a Generic, QSE and EME when it comes to B-BBEE?
What qualifies my business as EME (Exempt Micro Enterprise)?
Who qualifies as a black person for purposes of B-BBEE?
How can a measured entity obtain a B-BBEE Certificate?
More information can be found on the B-BBEE Commission website.
Who is Authorised to issue a B-BBEE Certificate?
A B-BBEE certificate can only be issued by a verification professional accredited with the South Africa National Accreditation Systems (SANAS).
More information can be found on the B-BBEE Commission website.
What qualifies my business as QSE (Qualifying Small Enterprise)?
What qualifies my business as GEN (Generic Enterprise)?
Which entities are measurable under the Codes of Good Practice (the Codes)?
The following Entities are measurable under the Codes:
How is B-BBEE classification determined?
Are organs of state and public entities required to be B-BBEE compliant?
Specialised EMEs are given an automatic level 4 but if it has 51% of black beneficiaries it will be level 2, and 75% black beneficiaries it will obtain a level 1. EMEs only have to obtain a sworn affidavit. See attached template for guidance.
How is a start-up enterprise measured?
How can an EME enhance its B-BBEE status?
Can a non-profit Organisation (NPO) be measured under the codes of good practice?
NPOs are already covered as a measured entity in terms of the Codes of Good Practice (the Codes) and are regarded as specialised enterprises (do not have ownership). Their B-BBEE compliance is measured in terms of statement 004 (starts on page 10 of the attached document).
Specialised enterprises are classified in terms of annual turnover, allocated budget or gross receipts. This means that a specialised entity with R0 and less R10 million annual turnover/allocated budget/gross receipts are regarded an as Exempted Micro Enterprise (EMEs), if annual turnover/allocated budget/gross receipts is above R10 million but less R50 million it is called a Qualifying Small Enterprise (QSE), and those with annual turnover/allocated budget/gross receipts of R50 million above are regarded as large entities.
Specialised EMEs are given an automatic level 4 but if it has 51% of black beneficiaries it will be level 2, and 75% black beneficiaries it will obtain a level 1. EMEs only have to obtain a sworn affidavit. See attached template for guidance.
Specialised QSEs have to be verified by an accredited verification agency (http://www.sanas.co.za) to obtain a B-BBEE certificate. But if it has 51% of black beneficiaries it will automatically be level 2 and 75% black beneficiaries it is a level. Also has to complete a sworn affidavit for QSEs.
Large specialised entities have to be verified by either a verification agency.
More information can be found on the B-BBEE Commission website.
When will a certificate expire in instances where a measured entity was re-verified prior to date of expiry.
In terms of the 2008 verification manual a measured entity which experienced a material change after a B-BBEE certificate was issued, must be subjected to re-verification. This process requires the withdrawal of the initial certificate, and the second certificate must indicate date of issue, date of re-issue and date of expiry.
Where a certificate is re-issued, the second certificate must indicate date of issue, date of re-issue and date of expiry. The date of expiry remains the same date as on the initial certificate, because reissuing a certificate does not extend the validity period.
More information can be found on the B-BBEE Commission website.
Can bonus points be included when calculating the 40% sub-minimum for priority elements?
The inclusion or identification of priority elements in the Codes is an intervention to accelerate the achievement of an inclusive economy and decent job creation.
Inclusion of the bonus points to calculate the sub-minimums would undermine the objective of accelerating economic transformation, and reducing B-BBEE into a tick box exercise.
More information can be found on the B-BBEE Commission website.
Is it a violation of the Act or an offence, or both to split or divide an entity?
In terms of Para 2.5 Codes Series 000, if an entity splits itself to ensure eligibility as an EME or QSE such would constitute an offence and such will be dealt with in terms of the Act.
More information can be found on the B-BBEE Commission website.
Can you commission your own Sworn Affidavit?
No, a Sworn Affidavit must be commissioned by someone with no interest in the company to exercise objectivity.
More information can be found on the B-BBEE Commission website.
Who can commission Sworn Affidavits?
Anyone who qualifies as commissioner of oath in terms of Justices of the Peace and Commissioner of oaths Act can commission an affidavit.
More information can be found on the B-BBEE Commission website.
How can an entity apply the modified flow through to obtain 51% and 100% black ownership?
In terms of Code Series 100, an entity may apply the modified-flow through principle to determine black ownership, where in the chain of ownership structure black people have a flow-through level of participation of at least 51%, then only once in that entire ownership structure of the entity such black participation may be treated as though it were 100%.
More information can be found on the B-BBEE Commission website.
Can entities operate with consolidated sworn affidavits for purposes of a joint venture?
The codes do not have a provision for consolidation of Sworn Affidavits in joint venture.
More information can be found on the B-BBEE Commission website.
How to calculate the 40% sub-minimum for priority elements?
The 40% sub-minimum is applied as follows:
Ownership:
40% on the 8 points for Net Value based on time graduation factor.
Skills Development:
40% to the total weighting points for skills development (40% to 20 points).
Enterprise and Supplier Development:
40% sub-minimum targets for Code Series 400 apply to each category namely, preferential procurement, supplier development and enterprise development.
This is interpreted as 40% to the total points of each of the three categories, meaning 40% of 25 points for preferential procurement, 40% of 10 points for supplier development and 40% of 5 points for enterprise development.
More information can be found on the B-BBEE Commission website.
General
What do I need to supply for the Year End EMP501 Reconciliation?
What are all the annual returns I must submit as a business owner?
How long does a Compensation Fund Letter of Good Standing take to generate?
Once Final Payment has been made, it takes up to 5 working days to generate.
What is the difference between a TCC and a letter of good standing?
A TCC (Tax Clearance Certificate) is generated by SARS for Tax Type Compliance.
What is COIDA?
COIDA (Compensation for Occupational Injuries and Diseases Act) provides for compensation for disablement caused by occupational injuries, death or diseases sustained or contracted by employees in the course of their employment.
Is another company able to assist me with Workmen’s compensation claims?
What is a tender?
Why do I need to register my Company with CIPC?
Simply put, you need to register a company because it becomes a registered entity, like when you are born, you are issued an Identity number, and with that Identity number you can purchase licences, properties, open bank accounts etc. like an individual, a company will have essentially the same rights as a person, but because it is not a human being that is self-sustaining, its owners, directors need to keep on updating CIPC (relate this to home affairs) regularly, pay annual fees, and abide by regulations set out in the Companies ACT.
Why do I need to pay to keep my company registered every year?
Fraud prevention.
What is the difference between a PTY LTD and a CC?
A Pty stands for Proprietary Limited which means it is a privately held company, and a CC which is a closed corporation are is usually chosen by smaller business owners.
How many directors can be on a company (Pty) (Ltd)?
A minimum of one natural person upon registration, and an unlimited maximum number of directors.
What is a sole trader?
How many directors can be on a Public Company / Non-profit Company?
Upon registration, three directors need to be appointed, and an unlimited maximum number of directors.
What types of directors are there in a company?
Normal Director, Non-Executive Director, Alternate Director.
What is a share certificate?
A share certificate is a certificate issued by a company certifying that on the date the certificate is issued a certain person is the registered owner of shares in the company. The key information contained in the share certificate is: the name and address of the shareholder. The number of shares held.
How do shares in South Africa work?
In order for you to buy shares, the currentowners of the company would agree to break the company into an example of 10 000 shares, each worth a certain amount. The value of the company remains at R500 000.00 (R50 share price x R10 000 shares), but you can now buy one share in the company at R50.00, or five shares at R500.
What is a company secretary?
Not to be confused with a receptionist or admin clerk, a company secretary just like a secretary of state, is responsible for compliance or legislative adherence, a person who sits in meetings of all kinds, advises on the legality of decision making, a company secretary does all the companies secretarial work, administering the Share’s, MOI’s, registrations and any other secretarial duties.
Do I need a company Secretary in my business?
Depending on the size of your business, you can outsource secretarial administrative work to be done, or you can employ an in-house secretary to maintain all legislative compliance.
How does an employment contract work?
Do I need HR services?
What are the disciplinary actions required for fraudulent activity in the workplace?
What do I need to supply to my accountant monthly?
Bank statements, creditor & debtor invoices and ledgers. (All financial records) the more supporting documentation, the better it is for accurate accounting. It has become good practice and legal standard to request all supporting documents within a business of any nature.
What are annual financial statements?
Annual Financial Statements are prepared annually to present the financial results of your business for the previous year ended, according to you yearend listed at CIPC.
Why do I need annual financial statements?
Each registered entity must prepare annual financial statements as per the Companies Act of 2008.This can either be reviewed or audited depending on the PIC score.
What is UIF?
UIF (Unemployment Insurance Fund) gives short-term relief to workers when they become unemployed or are unable to work because of maternity, adoption leave or illness.
When do I need to register my company with CIPC?
Legal
Why do I need a will?
What is an executor/executrix of an estate?
The person or persons that you trust and nominate via your will to maintain your affairs as if you were still alive. There can be more than one nomination and a company such as TFS Trustees can be appointed to maintain your affairs in your best interests that are legal and set in writing.
What is a trustee?
What is a Trust?
A trust is a legal entity that can issue and create powers for the intention to act on behalf of whatever entity it was replacing.
Do I need to open a trust for a business?
That’s a tricky one, though a trust for a business adds measure of control to the heirs of the owner, it also stipulates actions to be taken to continue the legacy of the business, especially small business owners who have spent a lot of time building their legacy.
When do I need to open a trust for a business?
As soon as you have realised that you want your success to continue in the form of your family legacy. Set up a trust that realizes your needs beyond your time left here as an entrepreneur.
What types of trusts are there?
Testamentary Trust, is a trust set up through a will of a deceased person, usually created for the intention of maintaining minor children into their adulthood, if a trust is not set up in a will, the estate is sold off and monies will only be paid out when the minors come of age to benefit from the estate.
Registrations
How long does an Import/Export registration take to finalise?
Should all documents be correct and no further documents are required by SARS, the registration should take up to 10 working days.
Do I have to register with The Compensation Fund?
It is compulsory to be registered with the Compensation Fund if you have one or more employees.
When should I register for VAT?
You may do an optional VAT registration once your turnover exceeds R50 000.00 in a 12 month period, but once your turnover exceeds R1 000 000.00, Vat Registration is compulsory.
Who must be registered as a Provisional Tax Payer?
When do I need to register my company with CIPC?
SARS
How do I calculate SDL?
How do I calculate PAYE (Pay as You Earn)?
Use Tax Tim. Tax Tim is a regularly updated Tax calculator that covers, PAYE (Pay as You Earn), UIF (unemployment Insurance Fund), SDL (Skills Development Levy).
What is PAYE?
How do I calculate UIF?
UIF is calculated at 1% of the salary you pay your employee but is capped at R14 872, you deduct 1% from your employee’s salary, and pay another 1 % over to SARS as your cost and contribution towards UIF.
What are all the annual returns I must submit as a business owner?
What is the difference between a TCC and a letter of good standing?
A TCC (Tax Clearance Certificate) is generated by SARS for Tax Type Compliance. A Letter of Good Standing is generated by the Compensation Fund for compliance with the Compensation for Occupation Injuries and Diseases Act.
Will I be asked for supporting documents on my tax return?
How does the audit process work when selected for an audit by SARS?
What is an IT3 or IRP5 certificate?
This is your annual Tax Certificate which summarises your annual earnings and deductions and is used to file your income tax return.
What is an IT34?
An IT 34 is a notice of Assessment from SARS, which summarises that specified year’s taxable income and deductions. Should you not agree with SARS’s assessment, you can dispute it and submit supporting documents for your claim that SARS is in error.
What are the implications of not submitting my SARS returns?
Administrative penalties and interest is charged on non-compliance, non-compliance is a criminal offence and could lead to legal action or imprisonment, and could be seen as evasion.
What is Provisional Tax?
Provisional tax is not a separate tax. It is a method of paying tax due, to ensure the taxpayer does not pay large amounts on assessment as the tax liability is spread over the relevant year of assessment. It requires the taxpayers to pay at least two amounts in advance during the year of assessment which are based on estimated taxable income. A third payment is optional after the end of the tax year, but before the issuing of the assessment of Final liability, however, this is worked out upon assessment and the payments will be off-set against the liability for normal tax for the applicable year of assessment.
COVID-19
What is COVID-19?
Who is most at risk?
How is it transmitted?
What are the symptoms of COVID-19?
How is COVID-19 treated?
Treatment is supportive (providing oxygen for patients with shortness of breath or treating a fever, for example). To date, there is no specific antiviral treatment available. Antibiotics do not treat viral infections. However, antibiotics may be required if a bacterial secondary infection develops.
How can you prevent infection?
What we are doing in South Africa?
On 23 March 2020, President Cyril Ramaphosa announced a new measure to combat the spread of the Covid-19 coronavirus in South Africa – a three-week nationwide lockdown with severe restrictions on travel and movement, supported by the South African National Defence Force – from midnight on Thursday, 26 March, to midnight on Thursday, 16 April. The President said more needed to be done to avoid “an enormous catastrophe” among the population.
What should you do if you think you have the coronavirus disease?
If you have fever, cough and difficulty breathing, seek medical care early. Stay home if you feel unwell. If you have a fever, cough and difficulty breathing, seek medical attention and call in advance. Follow the directions of your local health authority.
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