Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Sector Codes

Legal Sector Code, 2024

18. Key Measurement Principles
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18.1. The fundamental principle for measuring B-BBEE compliance by any LSME is that substance takes precedence over legal form.

 

18.2.In interpreting the provisions of the LSC, any reasonable interpretation consistent with the objectives of the B-BBEE Act and the B-BBEE strategy must take precedence.

 

18.3. The formulae that are used for measurement of initiatives, criteria, and indicators in the scorecards in this LSC shall be aligned to the formulae in the Generic Codes.

 

18.4. The basis for measuring B-BBEE initiatives under the LSC shall:
18.4.1. for the ownership and management control elements, be the B-BBEE compliance of the LSME at the date of measurement (as defined); and
18.4.2. for skills development and ESD elements, be the B-BBEE compliance of the LSME throughout the measured period.

 

18.5. Initiatives which split, separate or divide an LSME with the intent of ensuring eligibility as an LSME, a QSE or a new entrant enterprise shall constitute an offence and shall be dealt with in accordance with the provisions of the B-BBEE Act.

 

18.6. Any representation made by an LSME regarding its B-BBEE compliance must be supported by suitable evidence or documentation. An LSME that does not provide suitable evidence or documentation supporting any initiative shall not receive any recognition for that initiative.

 

18.7. Throughout the interpretation of the LSC, effect shall be given to the following underlying principles:
18.7.1. in the event that there is uncertainty or conflict, any reasonable interpretation consistent with the objectives of the B-BBEE Act must take precedence; and
18.7.2. any misrepresentation or attempt to misrepresent an LSME’s true B-BBEE status shall be dealt with in accordance with the provisions set out in the B-BBEE Act and may lead to the disqualification of the entire scorecard of the entity concerned.