Legal requirements to register a business

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Whatever your structure you need to be aware that the Government will still require you to register your business, register for income tax, VAT, UIF, COID, PAYE and to apply for certain licenses depending on your industry, your size and whether you are employing staff.

Register Your Business

If you're setting up a private company ((Pty) Ltd), you need to register your company as a legal entity. All the information you require can be found on the CIPC website.

Register with the SARS (South African Revenue Services)

Whether you're running a sole proprietorship, a partnership or a private company, you have to be registered with SARS. If you registered a company with the CIPC, you will automatically be registered as a tax payer with SARS. Sole proprietors or partners need to register as provisional tax payers directly. When you start a business, you will be required to register within 60 days of starting a business for an income tax reference number by completing an IT77 form, either at any SARS office or online.

Register as a VAT Vendor

If your turnover is or is expected to fall within the R1 million a year or more range, you will need to register as a VAT (Value Added Tax) vendor. This is done by completing and submitting a VAT101 Form, which is available at SARS offices

Register for PAYE

If your business intends to employ one or more staff members who earn over R40,000 per year, you have to register your company for PAYE (Pay As You Earn) tax contributions. In addition, if your payroll is more than R500, 000 a month, you will have to register for payment of the Skills Development Levy (SDL).

In order to do this, simply complete an EMP101 Form at any SARS office. This includes sections for contributions to the Unemployment Insurance Fund (UIF) and payment of the SDL.

For more information on the SARS required registrations please contact them at 0800-00-72-77.

Register with the Department of Labour

All business entities that employ one or more full-time employees will be required to register with the Department of Labour. This is mandatory in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA).

Here's how to register in terms of COIDA:

  • Complete and submit the WAs2 Form at the office of the Compensation Commissioner
  • Once registration has been completed, you will be sent the following additional forms to complete:
    • WAs8, which must be filed within 30 days of your financial year-end, and which must balance with your COIDA account
  • WAs6a, which details the assessment of the Commissioner for premiums payable, less any amounts that may have been paid in advance
  • WG30, WAs2 and WAc1(E), are claims forms that must be kept in a safe place for use if and when necessary

If you want further information about COIDA, the registration process, and the obligations of companies in relation to the Act, visit the Department of Labour's web site

Register with the Unemployment Insurance Fund (UIF)

All employers must register their employees for unemployment insurance, which can be done on Form UF8 at any SARS office, or online. They should also obtain copies of Form UI-19, which is required to register new employees when they join the company.

You will receive a copy of Form U133 to confirm your registration. Thereafter, UIF payments must be made monthly, either directly to the UIF or together with PAYE and the Skills Development Levy (if applicable).

Contact the Unemployment Insurance Fund (UIF) -

enquiries@uif.gov.za

021 941 7000

Municipal compliance

There are also municipal by-laws in the respective local area where your business intends operating which need to be considered. Local authorities regulate issues such as zoning, noise levels, hygiene etc. and will have an impact on your business depending on which industry you plan to operate in. For example, you will probably need permissions to run a noisy manufacturing operation, and health certificate for operating a food preparation business. Different local municipalities have varying by-laws and therefore varying guidelines for compliance. Always contact your local municipality in the planning stages of your business to see what their requirements may be. Many have local economic development sections which would be able to assist you.

See previous article Types of businesses

Disclaimer: This article has been prepared for information purposes only and does not constitute legal advice, or a legal opinion. The practical application of the provisions of this article will vary depending on the facts of each case. The publication, author of the article and companies or individuals providing commentary cannot be held liable in any way.

Source: Information kindly supplied by Red Tape Reduction, a Western Cape Government initiative

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