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THE

BEECHAMBER

AFFIDAVITS
THE PRESCRIBED FORMAT

2022

Amended General B-BBEE Codes of Good Practice

General

AFFIDAVITS

THE PRESCRIBED FORMAT

Upon the publication of the Codes of Good Practice

in 2007, the prescribed format for all businesses in

presenting their B-BBEE credentials was a

B-BBEE certificate issued by a SANAS accredited B-BBEE rating agency or,

until 2016, one prepared by the

Standards Department of the

Independent Regulatory

Board for Auditors (IRBA).

The 2013 amendments

to the Codes of Good

Practice, to remove the

financial burden of a B-BBEE

verification, allowed all Exempted

Micro Enterprises (EMEs) to present

a B-BBEE affidavit (affidavit) or CIPC

B-BBEE certificate to confirm their

level of 'Black' Ownership and

Financial Revenue Threshold.

Further amendments meant that

Qualifying Small Enterprises

with at least 51% 'Black'

Ownership (BO QSE) could do

the same. The amendments

apply to all public and private

organisations, as well as organs of

state. On 3rd September 2018, Practice

Guide 1 of 2018 was issued as a non binding guide, purely to assist with the

interpretation to ensure consistency in the

application of the Act.

Although the rationale behind an affidavit to confirm 'Black'

Ownership and financial revenue was to remove the burden

from small and ‘Black’-owned businesses, it does bring about

challenges for an organisation at the time of its B-BBEE

verification. One such challenge is brought about by the

deponent incorrectly applying the Ownership calculation.Since

the Commissioner of Oaths is likely not a B-BBEE specialist,

such a miscalculation may go unchallenged. Unfortunately,

such shortfalls in applying the Ownership calculation only

become evident at the time of a B-BBEE verification, which

can impact an organisation's Preferential Procurement score.

All sets of published Codes have a prescribed affidavit format,

each with its financial threshold. The published Practice Note

guides EMEs and BO QSEs in correctly submitting an affidavit

in the prescribed format.

> Generic Enterprises are organisations that do not

belong to a specific sector that falls within the ambit of a

published Sector Code.

> Sector Specific Enterprises, where an organisation falls

within the ambit of a Sector Code of Good Practice

promulgated under the B-BBEE Act. Qualification is

based on the sector from which an organisation derives

more than 50% of its revenue.

> Specialised Enterprises exclude ownership status from

the measurement benchmark. Such organisations qualify

as non-profit organisations, public benefit schemes,

organisations exclusively owned by organs-of-state, and

those limited by guarantee or higher education.

Bridget Themba is the Certificate Services Manager at the BEE Chamber and holds

a Bachelor of Business Administration Degree in Human Resources Management

and Marketing. Daily, Bridget is responsible for all operations pertaining to the

collection and validation, coordination and quality control of B-BBEE credential

collections on behalf of BEE Chamber members. She has extensive knowledge of

B-BBEE certificate validation

Affidavit Prescribed Formats Category Financial

Threshold

Generic Enterprises

BO QSE Between R10m

and R50m

EME Less than R10m

Sector Specific Enterprises

BO QSE Between R10m

and R50m

EME Less than R10m

Construction Sector Code

EME

Contractor Less than R3m

EME BEP Less than R1.8m

Defence Sector Code

BO QSE Between R5m

and R50m

EME Less than R5m

Forest Sector Code

BO QSE Between R10m

and R50m

EME Less than R10m

Financial Sector Code

BO QSE Between R10m

and R50m

EME Less than R10m

Information Communication

Technology Sector Code (ICT)

BO QSE Between R10m

and R50m

EME Less than R10m

Marketing, Advertising &

Communication Sector Code (MAC)

> Public Relations BO QSE Between R5m

and R10m

> Marketing, Advertising &

Communications EME Less than R5m

Property Sector Code

> Service-based

BO QSE Between R5m

and R10m

EME Less than R5m

> Agency-based

> Asset-based

BO QSE Between R2.5m

and R35m

EME Less than R2.5m

BO QSE Between R80m

and R400m

Tourism Sector Code

BO QSE Between R5m

and R45m

EME Less than R5m

Specialised Enterprises

BO QSE Between R10m

and R50m

EME Less than R10m

If an EME or BO QSE presents its B-BBEE status in any format

other than a prescribed affidavit, it is invalid.

Exceptions to the rule

> EMEs or BO QSEs falling within the ambit of the Transport

Sector Code, as it has not been amended since 2007.

Such organisations must present a B-BBEE certificate

issued by an accredited SANAS B-BBEE rating agency or

one prepared by their Accounting Officer.

> As per section 6.4 in Code Series 000, EMEs and BO

QSEs that opt to tender for work to the value of R50m

and above need to go through a B-BBEE verification

through a SANAS-accredited B-BBEE rating agency.

An affidavit relies on the honesty and integrity of a deponent.

In turn, organisations trust the information presented in an

affidavit to attain their Preferential Procurement targets. But,

by the same token, those evaluating the validity of an affidavit

should be able to recognise 'red-flag' areas and identify

whether an affidavit is in the correct format and includes all

necessary information.

A deponent must ensure that the affidavit they present is

representative of their business which also qualifies to use

an affidavit to confirm its Ownership and financial revenue.

For example, a QSE with less than 51% Ownership may not

complete an affidavit; they must go through the B-BBEE

verification process.

Validity of an affidavit for B-BBEE purposes

The deponent must sign an affidavit in the presence of a

‘Commissioner of Oaths’ as per the requirements in the

Justices of Peace and Commissioners of Oaths Act, 1963.

Notably, a Commissioner of Oaths must be independent;

therefore, they may not have had any direct connection to a

deponent to avoid any conflict of interest. A Commissioner

of Oaths signs and stamps the affidavit, binding it. No cost is

attached to a 'Commissioner of Oaths' notarising an affidavit.

Vital to ensuring an affidavit’s validity is:

> The date appearing on the affidavit and date stamp by the

‘Commissioner of Oaths’ must be the same.

> Any alterations, such as corrections, cross-outs or

additions made to an affidavit, must be witnessed by both

parties by initialling any alteration.

The information requirements of an

affidavit deponent are:

Name of the deponent as it appears in the

identity document. The deponent must be an

Owner, Director or Member of a business.

The deponent's South African identity number.

Indicate the designation of the deponent. It will

confirm that they are duly authorised to depose

an affidavit on behalf of the organisation.

The name of the organisation as it appears on

the registration documents.

Indicate whether the organisation trades under

a different name than the one registered.

Company registration number as per the

enterprise registration documents issued by

the CIPC at the time of registration.

Company VAT number, if applicable.

The physical address where the business is

operational.

Indicate the sector the organisation

represents and the nature of the business.

'Black'-owned means a juristic person,

having shareholding or similar member

interest, that is B-BBEE controlled, in which

'Black' Participants enjoy a percentage of

exercisable Voting Rights, Economic Interest

and have earned all points under Net Value.

These are determined under Code series

100, the total of such rights measured using

the 'Flow-Through' Principle. If applicable,

insert the percentage of 'Black' Ownership

and beneficiaries, the definition of which is on

page one of the affidavit.

If applicable, insert the percentage of ‘Black’ woman Ownership,

percentage of ‘Black’ Women holding Voting Rights, Economic Interest

and have earned all points under Net Value. These are determined under Code

series 100, the total of such rights measured using the 'Flow-Through' Principle.

If applicable, insert the percentage of Ownership held by 'Black' Designated Groups. The definition appears on page one of the affidavit.

If applicable, insert the total Ownership held by ‘Black’ Youth, which are people between the ages of 14 and 35.

f applicable, insert the total Ownership held by 'Black' People with

disabilities as defined in the Code of Good

Practice on the employment of people with

disabilities issued under the Employment

Equity Act.

If applicable, insert the total Ownership

held by ‘Black’ Unemployed People, which

category relates to 'Black' People that are not

attending, and not required by law to attend,

an educational institution and not awaiting

admission to such an institution.

If applicable, insert the total Ownership

held by 'Black' People living in rural and

undeveloped areas.

If applicable, insert the total Ownership held by

‘Black’ Military Veterans. The Defence Sector

Code clarifies the qualifying criteria for ‘Black

Military Veterans’. For this definition, it relates

to any ‘Black’ South African Citizen who:

> Rendered military service to any

of the Non-Statutory Military

Organisations that were involved in

South Africa’s Liberation between

1960 and 1994;

> Served in the Union Defence Force

before 1961;

> Became a member of the new

South African National Defence

Force after 1994; and

> Completed their military training but

no longer perform military services

and were not dishonourably

discharged from that military

organisation or force. The definition

does not exclude any person

referred to in paragraphs 4.5.1

or 4.5.2 who could not complete

their military training due to an

injury during military training or

contracted a disease.

Include the date of the latest financial year end-for example,

28th February 2022.

Tick the box that indicates the ‘Black’ Ownership status, which will allocate an organisation’s Preferential Procurement Recognition level.

Full signature of the deponent. The deponent must sign the affidavit in the presence of a 'Commissioner of Oaths' with no conflict of interest.

Must include the day, month and year of notarisation. Important to note that the date must be the date that appears on the notarised

stamp or the affidavit is invalid.

‘Commissioner of Oaths’ to sign and stamp the affidavit. To reiterate – if the day, month and year featuring under the deponent's

signature in any way differs from that of the 'Commissioner of Oaths', the affidavit is deemed invalid.


TFM Magazine - Issue 26 - 02 - Affidavits - The Prescribed Format
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