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.
We answer all your other frequently asked questions (FAQs) about registering a new business:
Where Do I Register My Small Business?
- You can register your company online on the Companies and Intellectual Property Commission (CIPC) website, or on the Bizportal.gov.za website, a platform created by the CIPC that offers company registration and related services.
- You can also register your company via a bank, including Nedbank and First National Bank.
- Another way to register your business is to outsource the admin to businesses that have the expertise to offer company registration services and related services. Many of them provide packaged services that include company registration and related services such as SARS consulting, labour registrations, CIDB registration, and upgrades, tax returns/ compliance, or accounting services.
What is The CIPC and What Does The Law Say?
The Companies and Intellectual Property Registration Office (CIPRO) were replaced by the Companies and Intellectual Property Commission (CIPC) in May 2011, together with the New Companies Act, the act changed the way business owners had to register their companies. The Act stipulates that no new close corporations (CC) can be registered, but those registered before 1 May could continue to operate as CCs.
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 – non-profit and for-profit companies, with other types falling under these categories.
What Types of Companies Can Register With The CIPC?
You can choose to register your company as one of the following:
1. Non-profit companies: A company incorporated for public benefit or other object relating to one or more cultural or social activities, or communal or group interests.
2. Profit companies: A business/organisation whose primary goal is making money, this includes anything from retail stores to restaurants to insurance companies to real estate companies.
3. 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’.
4. Public companies: A public company 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.
5. Private companies: These are similar to what was previously known as close corporations. Some of the changes made to private companies include fewer disclosure and transparency requirements, no longer being limited to 50 shareholders, and 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’.
How Long Does It Take To Register a Company?
According to the Online PTY Registration, a name reservation takes between seven to 21 days. A company certificate can be registered within five days afterwards, depending on whether you have submitted your documents on time, and the workload of the registrar’s office.
How Many Directors are Allowed in a Company?
At least one director.
Can I Register a Company If I have Been Blacklisted?
Yes.
Can Foreigners Register a Company in South Africa?
Yes. To do this, you need to provide a valid passport copy or RSA ID document and have a valid residential address in South Africa.
Am I allowed to Register a Company Without a Company Name?
Yes. According to the CIPC, in terms of the Companies Act, of 2008, a company may be registered with or without a company name. A company that is registered without a reserved name will still get a registration number, this will automatically become the company’s name.
CIPC says the company can transact with a trading (business) name or may apply to add a reserved name at a later stage. In this case, the company will need to first reserve a name and then apply for a name change.
How Does The Name Reservation Work?
In terms of the Companies Act, of 2008, a for-profit company (e.g. a private company) may be registered with or without a company name while a not-for-profit company must have a name. When a company is registered without a reserved name, its registration number automatically becomes the company name with (South Africa) as the suffix. This is the quickest way to register a company.
The process: According to the CIPC, if your initial name reservation application is not approved, you will need to apply for new names. During each application process, you may apply for up to four names.
The cost: Each name reservation application respectively costs R 50 online and R 75 manually. A company registration may vary between R 125 and R 475 (R 125 for a private company, R 475 for a non-profit company registered without members).
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. Since it is regarded as a filing fee and not an administrative fee, it is not refundable.
SME PARTNER
Should I Register My New Small Business For Tax?
Companies are first required to register with the (CIPC) offices before registering with SARS for an Income Tax reference number. Once a taxpayer is registered with CIPC, SARS will automatically generate an Income Tax reference number. Taxpayers must then register on eFiling to transact electronically.
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.
Small businesses with a turnover of up to R 1 million per annum will now be able to pay certain taxes (turnover tax, VAT and employees’ tax) twice instead of once a year, making the process more efficient for qualifying small business owners.
Turnover tax is a simplified tax system to make it easier for micro businesses to comply with their tax obligations. Turnover tax is worked out by applying a tax rate to the taxable turnover of a micro business. 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).
The nature of your business truly affects what you pay in tax.
Where Can I Apply for Funding After Registering My Business?
According to the South African Government, you can apply for various types of funding which is available through the Industrial Development Corporation or the Department of Trade and Industry’s Government Investment Incentives. Besides government funding, you can also apply for funding from the private sector.
- FULL GUIDE TO GOVERNMENT FUNDING AVAILABLE HERE
- SEE ALSO: Business Loans in South Africa
What Support is Available to Me After I Have Registered My Business?
The Small Enterprise Development Agency (Seda) provides business development and support services for small enterprises. Seda will give you all the information you need to start a business, including how to write a business plan, and once you have a business, to grow it.
- FIND OUT EVERYTHING YOU NEED TO START A BUSINESS IN SOUTH AFRICA HERE
- SEE ALSO: Everything You Need To Know About Enterprise and Supplier Development In South Africa
[UPDATE: 20 September 2021]
Other Services You Can Apply for on The CIPC Portal
You can also apply for the following services on the Bizportal.gov.za portal: business bank accounts, tax registration, B-BBEE certificates, Compensation Fund and UIF registration, Company name changes, address changes, and Annual Returns (Turnover). For the Annual Returns (Turnover) you can pay R 125 or more. The rest of the above services are free.
Here are 6 legal documents you may need to start your own business.
Should I Register My Company Domain Name as Well?
In 2018, the.ZA Domain Name Authority (ZADNA), partnered with the Companies and Intellectual Property Commission (CIPC) to enable businesses to register their domain name and business name simultaneously.
Domain name registration should be part of your trademark protection process.
“It is highly critical for a business to secure its domain name as early as possible to prevent online brand identity theft. A domain name gives your business digital presence and accessibility moreover, it enables a business an online brand establishment,” said Angel Selebano, Communications and Awareness Coordinator at ZA Domain Name Authority (ZADNA).
The above information is sourced by the Online PTY Registration, CIPC, South African Government website, and SARS. It was originally published in May 2014.
