South Africa Registered Companies

Are you considering establishing a company in South Africa? If so, you will need to define the
structures for each type of business entity.

First and foremost, it is essential to note that the Companies Act governs business registration in South Africa through the Companies and Intellectual Properties Commission (CIPC). Doing this shows legality, enhances credibility, and benefits your business by acquiring loans and tax exemptions. Here’s a breakdown of the different types of companies you can consider:

1. Non-Profit Company

A non-profit company aims to serve the public good rather than generate profit. These entities, formerly known as Section 21(b) companies, must direct all income and assets towards their company objectives and cannot be shared among members or directors.
They require a minimum of three directors and can be established by a group of three or more individuals.

2. Sole Proprietorship

It is the easiest and most common business structure, operated by a single owner who may employ others. This business does not provide limited liability protection, meaning the owner’s assets are at risk if the business faces debt. Profits from the company are
treated as personal income for tax purposes.

3. Partnership

It involves two to twenty individuals who agree to run a profit-driven business together. Partners contribute capital, skills, or resources and share profits per their contractual agreement. This structure is easy to set up as it does not require formal registration.

4. Public Company (Ltd)

A public company (Ltd) can raise capital by offering shares to the public and can be listed on the Johannesburg Stock Exchange (JSE). It requires at least three directors, one shareholder, and a company secretary. Public companies must hold annual general
meetings (AGMs) and are subject to strict auditing and regulatory requirements.

5. Private Company (Pty) Ltd

It operates for profit but does not offer its shares to the public. It requires at least one director and shareholder, but can be founded by one or more individuals. Notably,
directors do not have to be South African citizens or residents; unlike public companies, they cannot sell shares to the general public.

6. Personal Liability Company (Inc.)

It is similar to a private company and is commonly used by professionals such as doctors, lawyers, and accountants. It holds directors personally responsible for the company’s debts, creating higher accountability. This structure requires at least one director and one shareholder.

Other Types of Business Entities in South Africa

7. Small Business Corporation (SBC)

This type of company qualifies for tax relief based on its turnover and structure. To enjoy lower tax rates, it must meet specific requirements set by the South African Revenue Service (SARS).

8. Micro Business

It is characterized by its small size, often with a low turnover. These businesses can use a simplified turnover tax system to ease their tax burden.

9. Personal Service Provider

It is generally a company that offers professional services, such as consulting or legal advice, where the work is closely tied to the individual providing the service. These businesses are subject to specific tax rules, particularly if they have a single client or operate in a way similar to employment.

10. Labor Broker

A labor broker provides workers to other businesses and manages these labor forces for a fee. Labor brokers must comply with specific tax laws and may need to register with SARS and other regulatory bodies.

11. Independent Contractor

An independent contractor is a self-employed individual who provides services to clients under a contract. This structure offers flexibility but requires employees. Independent contractors manage their tax obligations, including VAT and income tax.

How to Register a Company in South Africa

Understanding the requirements for registering a company in South Africa is essential for legal compliance and business success. This guide will walk you through the necessary steps to complete online registration.

Step 1: Choose a Business Structure

Decide on the type of business entity you want to set up. As discussed earlier, each type has
different regulations and requirements. They include:

• Non-Profit Company (NPC)
• Sole Proprietorship (No formal registration needed)
• Partnership
• Public Company (Ltd)
• Private Company Ltd (Most common for small businesses)
• Personal Liability Company (Inc.)

Step 2: Reserve a Company Name (Optional)

You can register a company with or without reserving a name. If you want to reserve a name, it should be unique and different from existing businesses.

Submit at least 4 name options, then use the CIPC online portal to check if the name is available. If approved, the name will be reserved for up to six months.

Step 3: Register the Company with CIPC

• Visit the CIPC eServices website
• Create an account or login if you already have one
• Log in and select “Register a Business” under the services menu.
• Provide necessary company details, including:
• Company name (if reserved)
• Type of company
• Registered business address
• Contact details

Step 4: Upload Required Documents (CoR14.1 and CoR14.1A forms)

• Power of Attorney: if someone else is registering on your behalf.

Company Director Details:

• Names
• Certified copies of IDs for all directors or owners
• Date of Birth
• Contact Information

South African residents need a valid ID, while foreign nationals must provide a passport.

Company Information:

• Company name reservation confirmation (if applicable)
• Postal addresses
• Email Address
• Proof of physical address: a recent utility bill or lease agreement for the business address
• Fiscal year-end
• Shareholder information; including names and shares to be issued.
• Memorandum of Incorporation (MOI): outlines the rules and structure of your business. If you prefer a customized MOI, prepare it accordingly; otherwise, CIPC provides a standard MOI.

Step 5: Pay the Registration Fee

Company registration fees vary by type and whether a name is reserved. Fees range from R125 to R475. Please note that this is exclusive of our service charge. Complete the payment via EFT or CIPC’s online system.

Step 6: Await Confirmation

After submission, you will receive a tracking number. The CIPC will process your application and notify you of the outcome within 3–7 business days.

Step 7: Receive Registration Documents

If approved, you will receive:

• A company registration certificate (CoR14.3) via email to prove that your company is legally registered.
• Your company registration number.

After following the above steps consider these post registration requirements for company registration in South Africa.

Step 8: Register for Tax with SARS

After registration, your company will automatically be registered for Income Tax with the South African Revenue Service (SARS). However, depending on your business activities, you may need to register for additional taxes:

• Value-Added Tax (VAT)– If your business makes over R1 million per year, you must
  charge VAT on goods and services and pay it to SARS.
• Pay-As-You-Earn (PAYE)– You must deduct income tax from employees’ salaries and
  submit it to SARS on their behalf.
• Unemployment Insurance Fund (UIF) – A portion of employees’ salaries is set aside to
  provide temporary financial support if they lose their jobs.
• Customs Duties—If you are importing goods, they must go through customs, and you
  may need to pay import duties or taxes.
• Excise Duties and Levies: You must pay extra taxes on high-consumption or luxury
  items (e.g., alcohol and tobacco).
• Skills Development Levy (SDL): You will contribute 1% of your employees’ payroll to
  the SDL to fund skills training and workforce development.

Step 8: Open a Business Bank Account

Most banks require your Company Registration Certificate (CoR14.3), tax number, and directors’ ID copies.

Step 9: Comply with Other Legal Requirements

Depending on your industry, you may need additional licenses or permits, such as:

• B-BBEE Certificate (for government tenders or funding)
• Industry-specific licenses (e.g., liquor licenses, health permits)
• CSD Registration (if you plan to do business with the government)

Company Registration Verification South Africa

To check if a company is registered in South Africa, follow these simple steps:

Step 1: Visit the CIPC Website

This is the official site for company registration.

Step 2: Use the Search Tool

Click on “Company and Director Search” to access company details.

Step 3: Enter Company Details

If you have the registration number, enter it for accurate results. If not, search by company
name.

Step 4: Check the Results

The system will show key details like:

• Registration number
• Company status (Active, Deregistered, or Liquidated)
• Director information

Step 5: Double-Check with Other Sources

For extra verification, check:

• SARS for tax compliance
• National Treasury CSD for government suppliers

What are the Benefits of Registering a Company in South Africa?

Registration of a company in South Africa offers several significant advantages, enhancing the potential for success. Here are 6 key benefits:

1. Legal Protection & Limited Liability—A registered company is a separate legal entity
   that safeguards personal assets from business debts and liabilities.
2. Credibility & Business Opportunities—A registered company looks more
   professional, making it easier to attract clients and partners and secure contracts.
3. Access to Funding – Banks, investors, and government grants are more likely to
   support registered businesses.
4. Tax Benefits—You can qualify for tax incentives and deductions, reducing your overall
   tax burden and increasing your income tax savings.
5. Brand & Intellectual Property Protection – Your business name is legally secured,
   preventing others from using it.
6. Perpetual Existence – Depending on the company structure, registration allows your
   business to continue operating even if ownership changes, ensuring stability.