What is a BBBEE Affidavit: Complete Guide for Tender Applications

A BBBEE (Broad-Based Black Economic Empowerment) affidavit is a sworn statement that certifies a business's empowerment status and ownership structure. For tender applications, this document is crucial as it determines your BBBEE level and can significantly impact your competitiveness in the procurement process, especially under South Africa's preferential procurement policies.

Understanding BBBEE Affidavits

BBBEE affidavits serve as an alternative to formal BBBEE certificates for qualifying businesses. They provide a simplified way for smaller enterprises to demonstrate their empowerment status without undergoing a full BBBEE verification process.

What is an Exempted Micro Enterprise (EME)?

An EME is a business with an annual turnover of R10 million or less. These enterprises qualify for automatic BBBEE recognition and can use affidavits instead of formal certificates.

What is a Qualifying Small Enterprise (QSE)?

A QSE is a business with an annual turnover between R10 million and R50 million. QSEs may also qualify for affidavit-based BBBEE recognition under certain conditions.

Benefits of Using BBBEE Affidavits

BBBEE affidavits offer several advantages for qualifying businesses:

Cost-Effective Compliance

• No verification agency fees required
• Minimal administrative costs
• Can be prepared in-house
• No annual verification expenses

Time Efficiency

• Immediate availability when needed
• No waiting periods for verification
• Quick preparation process
• Flexible timing for tender applications

Administrative Simplicity

• Straightforward documentation requirements
• No complex verification processes
• Simple renewal procedures
• Minimal record-keeping requirements

Eligibility Criteria for BBBEE Affidavits

Not all businesses qualify for BBBEE affidavits. Understanding the eligibility criteria is essential:

Annual Turnover Thresholds

• EME: Annual turnover of R10 million or less
• QSE: Annual turnover between R10 million and R50 million
• Must be independently owned and operated
• Cannot be a subsidiary of a larger group

Ownership Requirements

The business must meet specific ownership criteria to qualify for affidavit-based recognition:

• At least 51% black ownership for enhanced recognition
• 100% black ownership for automatic Level 1 status
• Black women ownership for additional benefits
• Genuine economic interest and control

Creating a Valid BBBEE Affidavit

A properly prepared BBBEE affidavit must include specific information and follow prescribed formats:

Required Information

• Company name and registration number
• Annual turnover for the past financial year
• Percentage of black ownership
• Percentage of black women ownership
• Details of black shareholders and their race/gender
• Declaration of independent operation

Legal Requirements

• Must be commissioned by a Commissioner of Oaths
• Signed by an authorized company representative
• Dated and stamped by commissioner
• Include commissioner details and stamp

Standard Affidavit Format

"

1. The annual turnover of the business for the past financial year was R[Amount]
2. The business is [percentage]% owned by black people
3. The business is [percentage]% owned by black women
4. The business operates independently and is not a subsidiary

I acknowledge that any false information may result in legal consequences.

BBBEE Recognition Levels

Based on your affidavit information, your business will receive specific BBBEE recognition levels:

Automatic Recognition Levels

Using BBBEE Affidavits for Tender Applications

Proper use of BBBEE affidavits in tender applications is crucial for maximizing your competitive advantage:

Tender Submission Requirements

• Include original or certified copy of affidavit
• Ensure affidavit is not older than 12 months
• Verify all information is current and accurate
• Include supporting documentation if required

Preference Point Systems

Understanding how BBBEE levels affect tender evaluation helps you maximize your points:

• 80/20 system: Up to 20 points for BBBEE status
• 90/10 system: Up to 10 points for BBBEE status
• Higher BBBEE levels earn more preference points
• Level 1 provides maximum preference points

Common Mistakes to Avoid

Avoid these common errors when preparing and using BBBEE affidavits:

Documentation Errors

• Outdated or expired affidavits
• Incorrect turnover figures
• Inaccurate ownership percentages
• Missing commissioner of oaths details

Eligibility Mistakes

• Exceeding turnover thresholds
• Being part of a larger group
• Not meeting ownership requirements
• Failing to declare all relevant information

Renewal and Maintenance

Proper maintenance of your BBBEE affidavit ensures continuous compliance:

Renewal Timeline

• Affidavits are valid for 12 months from date of commissioning
• Renew before expiry to maintain continuous compliance
• Update when business circumstances change
• Prepare new affidavits for significant changes

Change Management

Update your affidavit when any of these changes occur:

• Business turnover exceeds thresholds
• Ownership structure changes
• Shareholder details change
• Business structure or operations change

Legal Implications and Compliance

Understanding the legal aspects of BBBEE affidavits helps ensure proper compliance:

Legal Requirements

• Affidavits must be truthful and accurate
• False information constitutes perjury
• Regular verification may be conducted
• Penalties apply for non-compliance

Verification and Audits

Authorities may verify affidavit information through:

• Random compliance checks
• Detailed verification processes
• Cross-referencing with other databases
• On-site inspections if necessary

Transitioning to Formal BBBEE Certificates

As your business grows, you may need to transition from affidavits to formal certificates:

When to Consider Transition

• Annual turnover exceeds R50 million threshold
• Need for more detailed BBBEE scoring
• Client requirements for formal certificates
• Business expansion and growth strategies

Formal Certificate Benefits

• More detailed BBBEE scorecards
• Comprehensive empowerment recognition
• Enhanced credibility with large clients
• Strategic planning opportunities

Conclusion and Next Steps

BBBEE affidavits provide a valuable compliance option for qualifying small and medium enterprises. By understanding the requirements, benefits, and proper usage of affidavits, you can maximize your competitive advantage in tender applications while maintaining cost-effective compliance.

Remember that BBBEE compliance is not just about meeting tender requirements—it's about contributing to economic transformation and creating opportunities for sustainable business growth in South Africa.