Starting a business might seem challenging, and knowing where to start is often what holds new entrepreneurs back. However, with the right guidance and knowledge you can solve any challenge and get your new business off the ground.
If you're establishing a private company((Pty) Ltd), you are required to register your company as a legal entity. All the necessary information can be found at the Companies and Intellectual Property Commission (CIPC) website .cipc.co.za
Registering with SARS.
Regardless of whether you're running a sole proprietorship or a private company, you need to register with the South African Revenue Services (SARS). If you've already registered your company with the CIPC, you'll automatically be registered as a taxpayer with SARS. Sole proprietors or partners are required to register as provisional taxpayers directly, and this can be done online or at any SARS office.
As soon as you start a business, you have to register with SARS and obtain an income tax reference number.
Kindly note that the 'IT77 registration form for Individuals' was discontinued and that the only way to register is to visit a SARS branch where the friendly staff will register you on our system.
Registering as a VAT vendor.
Should your annual turnover be R1 million or more, you will be required to register as a VAT (Value Added Tax) vendor. To do this, you need to complete a VAT101 form which is available at any SARS office.
To register as VAT vendor via e-filing on the SARS website click here.
Registering for Employee Tax.
If your business employs one or more staff members who earn more than R40,000 per annum, you are required to register your business for PAYE (Pay As You Earn) tax contributions. In addition to this, should your payroll amount to more than R500,000 per month, you are required to register for payment of the Skills Development Levy (SDL).
To do this, you simply need to complete an EMP101 Form at any SARS office. This Form also includes sections for contributions to the Unemployment Insurance Fund (UIF) and the payment of the SDL.
All businesses and sole proprietorships which have more than one or more full-time employees are required to register with the Department of Labour as it's mandatory in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA).
Complete and submit the WAs2 Form at the office of the Compensation Commissioner.
Once you completed your registration, you will be sent the following additional forms to complete from time to time:
The WAs8 Form, which must be filed within 30 days of your financial year-end, and which must balance with your COIDA account.
All business owners are required to register their employees for unemployment insurance. This can be done by filling out Form UF8 at any SARS office or online. Furthermore, business owners need to obtain copies of Form UI-19, which is necessary to register new employees when they join a company.
Once all of the above-mentioned steps are completed, you’ve successfully and legally registered your business. If any of these steps are confusing, it’s wise to reach out to a professional, a friend or a family member who has been down this road before.