24 July 2019– In South Africa there are five different types of companies that you can register and they can be registered either as a non-profit or profit company. A popular online and easy-to-use choice is the CIPC (Companies and Intellectual Property Commission) but there are many private companies who also charge a fee to manage the whole process for you.
While it is not necessary for all businesses to formalise their registration, companies that wish to do business with the government or formal sector or to participate in tenders are required to do so. These types of businesses will benefit from a lower tax rate than that applied to individuals. As a registered business, you will need to file an annual tax return and pay an annual fee – whether the company is trading or not.
However, more informal businesses and sole proprietors may not feel that there is initially much benefit to them to warrant this step. It is important to bear in mind that even though you may not formally register your company, you will still have to be registered with the South African Revenue Services (SARS), as you are liable for tax if your turnover exceeds the prescribed threshold.
In terms of the South African Companies Act, 2008, a company may be registered with or without a company name. If you register your company without a reserved name, its registration number automatically becomes the company name, which is the quickest way to register it. Your company may transact with a trading name or add a name at a later stage. If you add the name at a later stage, you will first need to reserve the name and then apply for a name change. There is an additional cost to this.
Whatever type of company you decide to register, you will require a Memorandum of Incorporation (MOI) which lays out the rules agreed to by the shareholders for the running and maintenance of the business activities. This MOI is available in a standard format or can be customised to impose certain conditions or waive specific requirements. If you decided on a customised MOI, it is suggested that you draw this up with the assistance of a legal person and this document must be submitted together with your company registration application.
A private company is the most common and simplest type of company to be registered. Private companies must have at least one Director and one Incorporator – who may be the same person. Close Corporations are no longer allowed.
The following steps need to be taken to register as a Private Company with a standard MOI on the CIPC’s website:
- Register as a customer here
- Deposit the required amount for the registration into the CIPC account
- Reserve your corporate name
- Register your Private Company with a standard MOLI online
The following supporting documents must be scanned and emailed to the CIPC at eServicesCoReg@cipc.co.za:
- Certified identity copy of applicant;
- Certified copies of the Identity Documents of the Directors and Incorporators;
- The name confirmation certificate (COR9.4), if applicable;
- Power of Attorney (if applicable);
- For trust or company/juristic person as an incorporator, the resolution and certified ID copy of the duly authorised representative must be attached.
A Company Registration Certificate can be issued within 3 – 5 days after the submission of all the required documentation. The MOI can take up to 10 days to process, especially if you have made any amendments to the standard version.
You can obtain more information here, If you have not already registered your company with SARS.