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BEE Compliance for Close Corporations (CC) in South Africa

Last updated: 2026-03-19

B-BBEE compliance for a Close Corporation follows the same framework as for a Pty Ltd — the rules are based on turnover thresholds and industry sector codes, not entity type. CCs with turnover below R10 million qualify as EMEs, R10–50 million as QSEs, and above R50 million on the full Generic Scorecard.

The ownership element calculation differs slightly for CCs because CCs have member interests (percentages) rather than shares. However, the principle is the same: the BEE ownership score is based on the percentage of the CC held by black people, measured by voting rights, economic interest, and net value. For a CC, voting rights and economic interest typically align with the member's percentage interest.

For many CCs, particularly those that have been operating since before 2011, the membership structure may have changed over the years. If you are looking to improve your BEE ownership score, bringing in new black members or selling a portion of existing member interests to black individuals or entities are common strategies. However, SARS and the dtic closely scrutinise these transactions for fronting.

Key Requirements

Key requirements
Requirement
EME affidavit for CCs with turnover below R10 million
BEE verification certificate for QSEs and larger CCs
Ownership measured by member interest percentages
All other scorecard elements same as Pty Ltd

Fees & Costs

Fees and costs
ItemAmount
EME affidavitFree – R200
QSE verificationR5,000–R15,000

Non-Compliance Penalties

Non-compliance penalties
Penalty
No direct penalties — BEE is an incentive system
Lost government and corporate procurement opportunities
Fronting is a criminal offence

Frequently Asked Questions

How is BEE ownership calculated for a CC?
BEE ownership is based on the percentage interest held by black members. If a CC has two members — one black holding 60% and one non-black holding 40% — the ownership score reflects 60% black ownership across voting rights, economic interest, and net value.
Can a CC improve its BEE ownership?
Yes. Existing members can sell or transfer portions of their interest to black individuals or entities. However, transactions must reflect genuine economic participation, not fronting. The dtic has strict anti-fronting regulations, and violations carry criminal penalties.
Does converting a CC to Pty Ltd affect BEE status?
The conversion itself does not change your BEE level. Member interests convert to equivalent shareholding. However, the conversion may offer more flexibility for BEE ownership structures, such as different share classes or employee ownership schemes, that are not available in the CC format.

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