General Business Archives

Company registration can take anything from about 5 days to about 5 weeks depending upon the type of company and the ability of the client to provide all of the necessary information and signatures. By far the simplest and quickest is a (Pty) Ltd. This is the one that normally takes about 5 days. If you are going this route, don’t reserve the name yourself. If you do, you’ll add a week or two to the process. Any other type of company can take 5 weeks or so, sometimes considerably longer. Here are some of the things that will slow…

You’ve got no money left. The bank won’t lend you any more. There are no orders coming in. You can’t pay your staff. Do you want to give up, or do you want to fight back? 1) You are not alone. I wouldn’t be writing this if you were.

For most companies the answer is no. The Companies Act of 2008 only requires a company to have their financial statements audited if its Public Interest Score is 350 or more. That would typically be a company with an annual turnover of about R300m and 50 employees. So why do we still get companies requesting audited financial statements? Let’s take a look at this. Reason 1. The company’s auditor did not want to lose the business, so failed to advise the owner(s) that not only are audited financial statements not needed, but the company doesn’t even need an auditor. Shame…

Actually, you don’t. A Non-Profit Organisation is an organisation that has been registered with the Department of Social Development as an NPO. It can take various forms from an NGO, a trust, or a Not for Profit Company (NPC). In all cases the Department requires that there shall be at least three unrelated members of the Governing Body. Also, it must have an altruistic motive. Also, your organisation can be registered with SARS as an Exempt (from tax) Institution and a Public Benefit Organisation. If anyone or company then makes a donation to your organisation, they can deduct the…

So you are starting a business and can’t decide whether it should be a company or remain a sole proprietor. It really depends upon the nature of the business, who your customers or clients will be and your expectation of success. So let’s take a look at it. One-man goods or service provider to the general public. You don’t expect to do more than earn a decent living, so you want to keep things simple and keep the costs down. Also, the general public don’t usually care whether they are dealing with a company or an individual. As far as…

If you want the company to have a name, then the minimum cost is R175. That is the CIPC fee of R50 for reserving the name and R125 for registration of a company. If you don’t register a name, you’ll end up with a company called something like K2020/001234/07. That’s if you do the entire job yourself. The alternative is to engage a professional, such as ourselves. The fee is currently R610 and then you know that you are tapping into a professional support service that will carry you through all of the statutory obligations applicable to companies. These include…

I get lots of calls from people who want to start a business. It is difficult to respond to them because they really have no idea what it means to start, grow and run a business. So, here’s a straightforward guide. Decide what the business will sell. What great idea do I have? What am I really good at? What are people/companies badly in need of? What do I need in order to deliver the goods or services? A factory? Plant and equipment? Offices? Office furniture and equipment? Delivery vehicles? How will I make connection with my potential customers? Word…

Over the holidays, I ran a sample of the companies that we have, in the past, registered for clients, to see what was their status at CIPC. 41% of them had either been finally de-registered, were “In de-registration process”, or had outstanding CIPC returns and were therefore one step short of being in de-registration process. So there’s a very good chance that your company falls into the 41% category! The consequences are dire. If your company is in de-registration process, the banks will have nothing to do with it. They don’t get flagged automatically, so you may not find this…

Many companies can qualify as Small Business Corporations (SBCs) and save a lot of tax, but most entrepreneurs are unaware of these benefits. The requirements are, in most cases, not difficult to satisfy. First off, the SBC must be a company or CC and all of the shareholders (or members) must be natural persons, so that rules out holding companies and trusts. Then the shareholders may only be shareholders of the SBC or of dormant companies (or CCs) each with assets of less than R5 000. If any of them hold other shares, they should sell those shares to a…

When the new Companies Act of 2008 was finally implemented a year later, we could no longer form Close Corporations. But should you convert? The main reason that CCs fell away was that owner managed companies (and a CC is owner managed) became so similar to CCs that the latter became redundant. The prinicipal changes were that an owner managed company: 1) Did not need an audit or an auditor 2) Did not need a company secretary 3) Did not need to draft formal financial statements. Contrast these with a CC which: 1) Does not need an audit, but must…

Here are some of the key questions that I ask when someone comes to me for advice about starting a new business. 1) What differentiates your company from its competitors? The point here is that if you think you can succeed just by doing what others do, then you’ve really got nothing to offer. You’ll just be another one of them. 2) How are you going to market your product or service? I think of marketing as either billboarding or search. Billboarding is putting you company out there for all to see (billboards, social media, radio and tv advertising, advertisements…

There’s a common misperception that a company has to be formed for a particular purpose. This is simply not the case. The standard short form Memorandum of Incorporation under the Companies Act of 2008 states that “The purposes and powers of the Company are not subject to any restriction, limitation or qualification”. This means that you could run a hotdog stand, rent out offices, and manufacture light bulbs, all in the same company. So, you could have – XYZ(Pty) Ltd trading as ABC (selling hot dogs) XYZ(Pty) Ltd trading as DEF (flying aero planes) XYZ(Pty) Ltd trading as HIJ (washing cars)…

So you’re thinking of starting your own business. Why may I ask? Freedom? Ha! Wealth? Ha! Ha! Passion? Now you’re talking! But if it is a passion for sewing or carving or designing or whatever it is that you do well, then sorry for you. You have to be passionate about being a business person, because it doesn’t matter what the underlying product is, you won’t succeed unless you run the business properly and that means you won’t be doing much of what the business does – you won’t have time. The beginning is all too easy. You don’t have…

The only way to stop SARS’ monthly penalties for non-submission of your dormant company’s tax returns is to do the returns or de-register the company at CIPC then at SARS. The first step is de-registration at CIPC and there are two cost options – 1) Simply stop submitting Annual CIPC returns and wait for CIPC to de-register the company. This can take between two and five years, but there’s no cost. Of course, if you don’t do the Annual Tax Returns the monthly penalties will pile up dramatically. 2) We can apply to CIPC to de-register the company. If the…

There are four steps to obtaining your first letter of good standing from COID. First, your company has to register with SARS as an employer. Next, your company has to register with COID as an employer. You’ll have to disclose its PAYE reference number, the type of work it does, the machinery used, the number of employees and their anticipated total annual salaries. The registration can now be done on line. Once your registration has been processed, you will receive an invoice for the first fees. You must pay this invoice. When your payment has been processed, you can go…

Nobody likes to be retrenched, fired, laid off, or whatever term you choose to use for termination of employment, but if you’re the boss, you can at least ease their pain. Donald Trump is the worst example. In his TV series, it was simply “You’re fired!” and he seemed to love it, but that’s Donald Trump for you. I’ve been the boss since I was 28 years old, so I’ve done a lot of hiring and firing. In my early days, I was a Donald Trump. It was by far the easiest route to take. Quick, final, and get out…

Any company in the construction business is likely to be required to register with the CIDB. So, who can register? CIDB stands for Construction Industry Development Board and has various grades of registration and various classifications of type of work that are separately registerable. Registration at Grade 1 is open to any company upon payment of the registration fee and submission of an application. Each of the many different classes of work, for example General building, Asphalt works, Road marking etc. must be registered separately and the fee is R450 in each case. Grade 1 companies…

You formed a NPC thinking that it would never accumulate profits, but now it sits with Retained Earnings and you can’t declare dividends. Can you convert it to a Pty? The straight answer is No. This conversion is not allowed in terms of Schedule 1(2)(1)(a) of the Companies Act of 2008. So what must you do? There are two issues How to extract the Retained Earnings and How to restart as a (Pty) Ltd company These can be dealt with in the following way – All Directors and employees of a NPC are entitled to reasonable salaries or earnings. You…

The absolute minimum cost is represented by the CIPC fees which are R50 to reserve a name and R175 to register the company. However, it is much easier to pay a little more and get professionals to do the job. They do it all the time so get the job done right first time and therefore more quickly than you would yourself. Typically their fees would be a total of R1 980 and these will often include a few extras, which themselves have value. Harbour and Associates, for instance, for R1 980 offers the most extras and these include –…

If you’re not asking yourself this question, you don’t live in South Africa! Even the JSE’s own share value took a dive this week because of a significant fall in turnover. So, what to do? Yes, we are all in it together. This is probably not your fault, but you can’t just blame the economy. It is your responsibility to ensure that your business survives despite the economy. Look around you. What did Standard Bank do in May and June 2019? They closed over 100 branches! Why? To cut costs, that’s why. So, step number 1. Re-calculate expected…

General Business

How long does it take to form a company in South Africa?

How to reboot your company after lockdown

Must my company prepare audited financial statements?

How do I form a Non Profit Organisation?

Should I register a small business as a company?

How much does it cost to register a company in South Africa?

How to start a company

CIPC will de-register your company

What is a Small Business Corporation?

Should I convert my CC to a company?

How to kick start your new company

Can I run two businesses in one company?

How do I start my own business?

What does it cost to de-register a company?

How do I get a Letter of Good Standing from COID?

How to soften a retrenchment

Who can register with CIDB?

How to change a NPC to a Pty company

What does it cost to register a company?

How can I save my business?