By Hoffman van Zyl : Adams & Adams
Companies are regulated by the Companies Act, 2008 (“the Act”), which came into force on 1 May 2011. In order to register a company, the following documents have to be completed and submitted to the Companies and Intellectual Property Commission (“CIPC”), together with the prescribed fee of R175:
- Notice of incorporation (CoR 14.1) (with the relevant supporting documents)
- Memorandum of incorporation (CoR 15.1) (“MOI”) (with the relevant supporting documents)
These forms are available on the CIPC’s website. After submitting the abovementioned documents to the CIPC, it takes between 3 and 6 weeks, depending on the workload at the CIPC, for the documents to be processed and the company to be registered accordingly.
Even though it is not a requirement in terms of the Act for the shareholders to enter into a shareholders agreement where there is more than one shareholder, it is wise to conclude such an agreement to regulate the relationship between shareholders and to define their duties and responsibilities. When drafting such an agreement, careful consideration should be given to the Act as well as the company’s MOI, as any provisions contained in the shareholders agreement will be void to the extent that it contradicts the Act or the MOI.
Once a company has been registered with the CIPC, the next step will be to register the company for income tax, value added tax (“VAT”) (where applicable) and pay-as-you-earn (“PAYE”). All companies must be registered for income tax, which registration can be done by completing the IT77C form and submitting it to SARS together with the relevant supporting documents.
With regards to VAT, only companies with an annual taxable income exceeding R1 million are obliged to register for VAT. However, a company with an annual taxable income between R50 000 and R1 million, may voluntarily register for VAT. In order to register for VAT, a completed VAT101 form as well as the relevant supporting documents have to be submitted to SARS.
If the company intends on having employees, it should also register as an employer for purposes of PAYE. This registration can be done by submitting a completed EMP101e form with the relevant supporting documentation to SARS. In theory, it should take SARS around 21 business days to process the applications for income tax, VAT and PAYE, but in practice, it can take between 4 and 6 weeks. Fortunately, there are no costs involved with these tax registrations.
Lastly, if a company has employees, it must also register with the Compensation Commissioner as an employer in terms of the Compensation for Occupational Injuries and Diseases Act, 1993 (“COIDA”), and it must further register for the Unemployment Insurance Fund (“UIF”), both of which can be done at the Department of Labour. Details of both these registrations, as well as the applicable forms, can be found on the Department of Labour’s website.
National Small Business Chamber