BEE Compliance for Close Corporations (CC) in South Africa

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.