Want to register a company in South Africa? There’s more to it than meets the eye…
Entrepreneurs wanting to register their own companies, without the help of a qualified service provider, have a long list of requirements to meet. It’s not quite as easy as 1-2-3-4… Here’s what to expect:
1. Get to know the Companies and Intellectual Property Commission (CIPC)
The first step for any company registration is to contact the CIPC, who are in charge of registering all companies, co-operatives and intellectual property rights in South Africa.
Before you can do anything with CIPC, you need to go through the customer registration process and confirm your details on their website (which has been built by people who do not understand the term “user-friendly”). The next step is finding out if the name is available, and which other options might be available – this can take quite some time, as you can imagine.
Once the name has been verified as available, the actual business registration can begin – a registration which must be paid for using an archaic method of payment. There are various forms that need to be downloaded, but only certain sections must be filled in. If there are any mistakes on the forms, they are sent back and the registration process has to begin again. These forms include everything from a notice of incorporation to an appointment of auditor, a memorandum of incorporation to a model constitution. And more.
Each stage of the CIPC registration has to be paid for precisely, and if there have been any changes in price since the last website update (quite likely) the entire process is stalled, while they post the forms back to you. Oh yes, the postal system is the preferred method of communication. The alternative is going to the CIPC offices in person, and waiting in endless queues.
Average time to complete business registration: Up to 6 weeks (if you’re lucky).
2. Spend some quality time with the South African Revenue Service (SARS)
Once your company has been registered with the CIPC, the fun really starts – you then need to register for tax with SARS. This has to take place at a local branch (that matches your business registration address) and you must fill in all the correct forms for income tax, VAT and PAYE (employee withholding tax).
Registering a business for tax is unfortunately not as easy as registering an individual for tax. The company has to register as an employer and supply all the necessary documentation, directly to the SARS office.
Average time to complete tax registration: Once the complete application is submitted, it takes 2 to 4 weeks for registration.
3. Open a Business Bank Account
Regrettably, opening a business bank account isn’t nearly as easy as opening a personal bank account – there’s no way to breeze in with your ID and breeze out with an account number. In general, banks require proof of three company directors and the original company documents – which means the above company registration has to be done before you can open your bank account. Some accounts also ask for an income tax number – which means the above tax registration has to be completed before you can open your bank account.
No company can legitimately start trading without their own business bank account (there’s no quicker way to lose credibility than to invoice with your personal bank account details) so this could mean significant delays in starting business.
Average time to open a business bank account: Dependent on both the business registration and the tax registration. Once that has been completed, as long as it takes to get all the necessary forms and paperwork together, stand in line at the bank, and sign all those forms…
4. Register with the South African Department of Labour
It’s not just SARS that needs all your details – the South African Department of Labour also requires all new companies to register for the Unemployment Insurance Fund (UIF) and the Compensation for Occupational Injuries and Diseases Act. The necessary registration forms have to be hunted down from the Department of Labour and submitted by the good old postal system, or in person – no other options are currently available. Payment must also be made. Once the application is approved, a special form to confirm registration is issued.
Average time to register with the Department of Labour: Up to 10 working days, once you have completed all the necessary documentation.
As you can see, registering a company in South Africa is a complicated process, peppered with frustrating hurdles… Why put yourself through this when you can have your company registered with Company Worx in only 72 hours?