South Africans are a versatile nation and are always coming up with exciting and innovative business ideas. However, many trade without correctly registering their businesses as they may feel that there are more disadvantages than 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 the 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 that realise a profit or exchange goods or services for a fee must be registered under South African law.
Successful registration allows businesses to enjoy the protections afforded by legislation. To successfully register your business, there are several 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 that 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).
When 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 benefits 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 compensates 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, the government has also instituted many incentives for the development of businesses. 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 about the compliance of your company contact us and we will gladly assist you.