South Africans are a versatile nation and as such are always coming up with interesting and innovative business ideas. However, many trade without correctly registering their businesses as they may feel that there are more disadvantages to advantages or that the process is overly complicated. This article aims to outline the basics of registering your business.
Whether you’ve founded a marketing company or a home-based beauty salon, if you’re making a profit for your efforts you’ve got a business. You may think that you are too small or unsophisticated to be a traditional business, but that is most definitely not the case. All businesses which realise a profit or have an exchange of goods or services for a fee are required to be registered under South African law.
Successful registration allows businesses to enjoy the protections afforded by legislation. In order to successfully register your business, there are a number of institutions with which South African businesses are required to be registered. These include CIPC (Companies and Intellectual Property Commission) and as well as SARS (South African Revenue Services). A requirement for registration as a VAT Vendor applies where your projected turnover is likely to exceed R1 million. Businesses who have employees earning over R83 316.00 annually are further required to register for employee tax, this is where the business registers for PAYE (Pay As You Earn) tax contributions, payable by the business from the income earned by employees. Where your payroll exceeds more than R500 000.00 monthly your business is required to register for the payment of the Skills Development Levy (SDL).
Where we turn to the labour aspect of business registration, the Department of Labour also requires all businesses with full time employees to be registered with them, this is in terms of COIDA (Compensation for Occupational Injuries and Diseases Act). This Act provides benefits to both the employee and employer. COIDA provides benefits to employees who are injured or develop occupational diseases in the course and scope of their employment. COIDA protects employers from personal liability in these circumstances as it provides compensation to employees who are rightfully entitled to it. Further, registration for UIF (Unemployment Insurance Fund) is essential. Employers must register all their employees for this as it provides a safety net for employees where a business is no longer willing or able to continue with the employment relationship.
Apart from the essential registration requirements by legislation, government has also instituted many incentives for the development of businesses. In order to qualify for these incentives, businesses are required to be registered as such. These initiatives provide training, resources and funding to businesses. These initiatives aim to enable businesses to succeed and boost our country’s economy.
Should you require the registration of your business or have any queries with regards to the compliance of your business contact us and we will gladly assist you.