As a result of the COVID-19 pandemic, many people have ventured into starting their businesses with the hope to create a stable income and survive the economic woes faced by South Africa. Instead of operating an unregistered business and lacking professionalism, registering your business surely contributes to your image as a business owner, your professional level, and protecting your assets in a long term.
Regardless of whether you are a making profit or the size of your company, there are advantages to registering your business in South Africa. These include business name protection, tax incentives, financial assistance, and business compliance. In today’s blog, UASA has put together some information in terms of how you can register your business in South Africa.
What is the Companies and Intellectual Property Commission (CIPC)?
You can register your company online on the Companies and Intellectual Property Commission (CIPC) website. The Companies and Intellectual Property Registration Office (CIPRO) replaced the Companies and Intellectual Property Commission (CIPC) in May 2011.
All companies fall under specific categories, each with specific requirements in terms of the documentation that is required. The Companies Act provides for two main categories of companies, this includes non-profit and profit companies, with other types falling under these categories.
If your initial name reservation application is not approved, you will need to apply for new names. You may apply for between 1 and 4 names during each application process. Each name reservation application costs R50. A company registration may vary between R125 and R475 (R125 for a private company, R475 for a non-profit company registered without members).
According to the Online PTY Registration, a name reservation takes between seven to 21 days. A company certificate can be registered within three to five days afterward, depending on whether you have submitted your documents on time and the workload of the registrar’s office.
What types of companies can register with the CIPC?
You can choose to register your company as one of the following:
Non-profit company – A company incorporated for public benefit or other object relating to one or more cultural or social activities, or communal or group interests.
Profit companies – A business or organization whose primary goal is making money, this includes anything from retail stores to restaurants to insurance companies to real estate companies.
Personal liability companies – Company directors and past directors are jointly liable for any debts and liabilities arising during their periods in office. The company name ends with the word ‘incorporated’.
Public companies – A public company is one that has issued securities through an initial public offering (IPO) and is traded on at least one stock exchange. It has more than 50 shareholders and its shares are offered to the public.
Private companies – These are similar to what was previously known as close corporations. Some of the changes made to private companies include few disclosure and transparency requirements, no longer being limited to 50 shareholders, and with a board that must comprise at least one director. The name of a private company must end with the expression ‘Proprietary Limited’ or ‘(Pty) Ltd’.
Should I register my new small business for tax?
For every new business established, you are required to register with your local SARS office to obtain an income tax reference number. Registration must be done within 60 days after starting operations by completing an IT77 form, available at your local SARS office or from the SARS website.
Depending on other factors such as turnover, payroll amounts, whether you are involved in imports and exports, etc. you could also be liable to register for other taxes, duties, levies, and contributions such as VAT, PAYE (Pay-as-you-earn) UIF contributions (unemployment insurance contributions).
Operating a business legally contributes a lot towards economic development, hence we advise you to register your business to be formally recognized. In our next blog, we will look at some government funding that is available in South Africa that you can consider and apply towards the sustainability and growth of your business.