Frequently asked questions

• Private company (Pty) Ltd
• Public company (Ltd)
• State-owned company (SOC)
• External company
• Personal liability company (Inc)
• Non-profit company (NPC)

Private companies are comparable to companies of the same status under the Companies Act 1973. They are subject to fewer disclosure and transparency requirements. A private company is prohibited from offering its shares to the public and the transferability of its shares is restricted, but it may now have more than 50 shareholders. The name must end with Proprietary Limited or the abbreviation (Pty) Ltd. The board must have at least one director, or any higher minimum stipulated in its MOI. Each incorporator is a first director.

Register a private company.

Its MOI permits it to offer shares to the public but restricts, limits or negates the right of pre-emption. The name must end with Limited or Ltd. A public company must have at least three directors, and under the 2008 Act only one member is required for incorporation, compared to seven under the previous Act.

A personal liability company meets the criteria for a private company, and its name ends with Incorporated. Its MOI provides that directors and past directors are jointly and severally liable, together with the company, for any debts and liabilities contracted during their respective terms of office.

• Incorporated for a public benefit purpose.
• Income and property may not be distributed to incorporators, members, directors or officers, except as reasonable compensation for services rendered.
• The name ends with NPC.
• A minimum of three incorporators must complete and sign the MOI.
• A minimum of three directors must be appointed.
• All assets and income must advance the objectives set out in the MOI.
• NPCs are subject to a varied application of the Act as set out in section 10, and to the fundamental rules in Schedule 1. On dissolution they are restricted in how residual assets may be distributed.

Register an NPC.

An SOC is either a company defined as a state-owned enterprise in the Public Finance Management Act 1 of 1999, or one owned by a municipality as contemplated in the Municipal Systems Act 32 of 2000. The name must end with the expression SOC Ltd.

An external company is a foreign company carrying on business or non-profit activities within South Africa. It must register with CIPC within 20 business days after it first begins to conduct activities here, as either an external company or an external NPC. A foreign company is prohibited from offering securities to the South African public unless it follows the specific provisions of the Act.

A partnership is when two or more people conduct a business together, and all partners bear equal responsibility for debts incurred. A written partnership agreement is the only requirement to set one up, and it should deal with formation, profit sharing, salaries, banking arrangements, changes of partners, liquidation and the responsibilities of partners. It is worth consulting a legal expert to draw it up.

A partnership is not allowed more than 20 partners, except in certain instances, and all partners must include partnership income in their personal tax returns.

In most cases it is better to register a company with the name you intend to trade under. That name is then protected: if somebody else tries to register it, they will not be allowed to.

Where there is more than one member, it is worth negotiating a buy-and-sell agreement. Under it, the members undertake to buy out each other's interest when one of them dies. A life insurance policy is usually considered the best way to finance that transaction. Speak to a legal advisor about setting one up.

Yes. All registered companies are required by SARS to submit ITR14 (annual income tax) and IRP6 (provisional tax) returns, even if the company has no income or active trading activity. Failure to do so leads to penalties and a non-compliant tax status.

The IRP6 is a provisional tax return submitted during the tax year to pay tax in advance. The ITR14 is the final annual income tax return. Together they keep a company fully compliant with SARS.

An IRP6 provisional tax return is R750 and an IT14 (ITR14) company income tax return is R750.

Bookkeeping starts from R390 per month and includes recording all income, expenses and financial transactions. That ensures accurate tax submissions, correct VAT, PAYE and UIF calculations, and readiness for a potential audit.

Yes. Payroll starts from R120 per month and covers employee salaries, payslips, and the deduction and submission of PAYE, UIF and SDL to SARS and the Department of Labour.

Yes. VAT registration is R3,500. We also manage ongoing VAT return submissions and provide oversight to help you avoid SARS penalties.

Yes. We assist with import and export licence registrations through SARS Customs for R3,000.

A trademark registration for R3,500 secures the legal rights to your business name, slogan or logo within South Africa.