National Small Business Act: MSME Classification Criteria Replaced

Posted 27 May 2026 Written by Acts Online
Category Small Business Development

Brought to you by SA Legal Academy: The Department of Small Business Development has gazetted proclamations immediately replacing the schedule to the National Small Business Act, No. 102 of 1996, which prescribes the criteria for classifying enterprises as micro, small, or medium.

In terms of the newly gazetted proclamations, the revised schedule replaces the previous framework used to define and classify micro, small, and medium enterprises (MSMEs) in South Africa. This update follows the publication of the draft classification criteria for public comment in September 2025.

The classification of MSMEs under the Act is determined by specific thresholds, which typically assess variables such as:

  • The total full-time equivalent of paid employees; and
  • The total annual turnover of the enterprise within its specific sector.

These revised thresholds are critical for determining eligibility for government small business support programmes, regulatory compliance concessions, and sector-specific funding initiatives.

What this means for you, your business, or your clients

  • For yourself: No direct individual obligations; impact is channelled through professional advisory roles when advising business entities on their regulatory status.
  • For your business: Assess your firm’s current employee headcount and annual turnover against the newly gazetted schedule to confirm your correct enterprise classification.
  • For your clients: Review client portfolios to identify which businesses qualify under the new micro, small, or medium thresholds, ensuring they leverage appropriate regulatory exemptions or support structures.

Originally published at https://legalacademy.co.za/news/read/national-small-business-act-micro-small-medium-enterprise-classification-criteria-replaced

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