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An Outline Procedure to Incorporate a Company in South Africa That You Must Know Before Starting a Business

Are you a foreigner or a local investor with plans to incorporate a company in South Africa? Are you well acquitted with the rules and regulations on how to incorporate a company? Forming a company in South Africa follow some steps that validate the entire process. Before you begin the process, you must select a unique business name, and as soon as you make the payment, your company names are presented for reservation with the first accessible name reserved by the Registrar of Companies. Afterward, a power of attorney form is presented to you over the email to be submitted back with verified copies of all the director’s details.

 

Registered Company

To set up a company in South Africa, you must first choose a unique company name and pay a registered name fee. Your company name will be recorded in the South African Companies Registry. A Power of Attorney is then submitted to the Registrar via email with all director details.

The company name will cost around R50. The entire company registration process may cost R125 (private company) to R475 (non-profit company) and the process will take 3 days if you apply electronically.

If you are not in South Africa yourself but plan to set up a company in South Africa, you don’t need to worry about it being a hassle. The Companies and Intellectual Property Commission (CIPC) has an online registration process that makes the process faster and more efficient. Before a South African company can conduct business transactions, a transaction certificate and bank account are required.

 

Company Structure

There are various options regarding the type of corporate structure. You may choose to register your company as a privately held company (CC), a structure in which corporate members cannot hold shares but guarantee members’ interest in the entity. It also requires at least one member and a maximum of 10 members. A private limited company (Pty) is another option that requires at least one director and does not limit the number of shareholders. Every company needs to have its own Articles of Association, which should stipulate the Memorandum of Incorporation as well as the Shareholders Agreement.

 

Company Tax

The essence of entrepreneurship is to create opportunities and solve needs. Therefore, setting up a company in South Africa must work hard to meet tax requirements and contribute to the local economy. To do this it is necessary to register with the South African Revenue Service (SARS) office for income tax, VAT and withholding tax. This process will take approximately 12 working days after you submit your registration documents.

 

Workers

The normal operation of every enterprise is inseparable from employees. The process of hiring an employee in South Africa can be tedious, but regardless, an application for the Unemployment Insurance Fund (UIF) with the Department of Labor is mandatory. As an employer, you are responsible for applying for coverage for your employees under the Occupational Injury and Disease Commissioner Act. The process is designed to provide health and injury coverage while on the job, where the process may take 4 or 10 days after submission of the registration process. To facilitate your business operations, you should complete employee registration before registering your office.

To learn more about setting up a company in South Africa, please contact us and 3E Accounting will assist you wholeheartedly.