Small Business Corporation Archives

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…

If you are a small supplier of goods, you may be wondering whether would be better to trade through a company. The answer is usually “Yes”. The first question I ask is “Are you providing a service or supplying goods?” If you are supplying goods, then the answer is usually yes, rather trade through a company. Why? 1) Your customers will probably respect a company more than a sole trader. 2) Companies are taxed at 28%, individuals at from zero to 45%. You can balance your salary in such a way that the total tax is minimised. 3) The company…

Many people continue to believe that it is better to provide their personal services, typically consulting, through a company rather than as individuals. Not so. A Personal Service Company is one which provides services such as consulting, bookkeeping, designing etc which are actually services provided by a person rather than product supplied or non personal services, such as rental property. In order for it to be classified as a Personal Service Company a number of tests are applied. You can research more deeply if you are unsure whether these tests are satisfied in your case or not. Remuneration. Does it…

There are massive benefits in having your company or CC classified as a Small Business Corporation – most particularly a potential tax saving of approximately R90,000 every year. Here is how you qualify – 1) All members (shareholders) must be natural persons (i.e. no trusts or other companies). 2) No members may hold shares in any other private companies except dormant companies with less than R5 000 assets. 3) Turnover of the company and its subsidiaries must not exceed R20m. 4) No more than 20% of the turnover and capital gains may consist of investment income (such as property rental) and…

Small Business Corporation

What is a Small Business Corporation?

Should I trade through a shelf company?

Tax law relating to Personal Service Provider Companies

Small Business Corporations

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