Getting a new business off the ground is an exciting time and with it comes a sense of urgency to make the business official. Perhaps you’re in the position where you have developed your small business over time and want to begin the process of formalizing it.
Naturally, registering your business seems the next logical step. Not all business entities, however, require registration.
No registration
If you are a sole proprietor, then you may choose not to register the business. In fact, there may not be sufficient benefits for sole proprietors and informal businesses to register their businesses. Registrations have to be renewed annually at a prescribed fee, which is based on the annual turnover of the business. If you miss this renewal your business could be deregistered and reregistration can be a time-consuming and expensive process.
A sole proprietorship is a type of business entity that is owned and run by one natural person and there is no legal distinction between the owner and the business. In this case, you simply start using your chosen trading name, for example, when opening a bank account or getting business cards printed.
Keep in mind however that you may have to obtain a license or permit, depending on the nature of the business you intend operating. For example, places that serve food need trade licenses. Also, you will still have to be registered with the South African Revenue Services (SARS) and will be liable to pay tax if your turnover exceeds a certain threshold.
Registering with the CIPC or the High Court
If you’re not a sole proprietor and want to register your business, your next step is to determine whether you need to register with the Companies and Intellectual Property Commission (CIPC) or the High Court.
If you want to register your business as a trust, then you will need to register it with the Master of the High Court and you will need to do this in the jurisdiction where your business has the most business assets.
In all other cases, you will register with the CIPC. In other words, if you are a private company, personal liability company, non-profit organization, cooperative or public company.
Options for registering with the CIPC
There are two ways you can go about registering with the CIPC. You can do it via the CIPC BIZPORTAL website at www.cipc.org.za or submit the required documentation at one of the CIPC offices.
Remember, in all cases, you will need an ID document and proof of address for each registered owner.
For more information, see Registering your Business, page 6-9, The Nedbank Essential Guide for Small Business Owners.
1 comment
I am all for registering your business. But I chose not to register anything until I have a customer paying me or a customer ready to pay me. I have mentored TOO many entrepreneurs who have registered, incorporated, set up bank accounts and more and nine months later still have NO customers. You ONLY have a business once you have a customer.