How to register a company
Starting a new business requires more than just a good idea and a good business plan. A business must be registered in the right way from the start and registered with the right institutions to be effective immediately. In this article we will look at the establishment of a company and the necessary statutory registrations.
Establishment of company
A private company must have at least one shareholder in terms of the new company law. If the business is to be bankrupt, everybody’s responsibility for debt is limited to the money or amount he has contributed to buying his shares. Shareholders share in profits in the form of dividends. The company has its own legal personality, ie the law sees it as a corporate body and the company is responsible for the debt of the business. The company is registered with the Registrar of Companies in Pretoria, but does not have to comply with the strict statutory requirements of the public company.
- Value added tax (VAT). Register for VAT if the annual turnover is / will be more than one million rand. Voluntary registration can only take place if it is proved that the annual turnover exceeds R50,000.
- Unemployment Insurance Fund WFF (UIF). Here you must apply to the Department of Labor in Pretoria to register as an employer. It is 1% of salaries paid by the employer and 1% paid by the employee. Note that the payment is in combination with PAYE and VHF levy if the business is registered for PAYE.
- LBS (Pay as you earn, PAYE). Register the business at the South African Revenue Service (SARS) for the surrender of employee tax deducted monthly from employees’ salaries.
- Skills Development Levies (SDL) is paid to SARS and is an employer contribution of 1% of salaries. It is compulsory when the annual total salary account exceeds R500,000. This money is used by the state to create new jobs and to train people.
- Income tax on company profits is paid to SARS annually and amounts to 28% of profit unless the company qualifies for Small Business Corporation tax rates. Registries with Compensation Commissioner:
- All employers employing one or more employees are required to register with the Compensation Commissioner. It serves as the employee’s “insurance” at the expense that may be vigorous when an employee receives an injury on duty.
- A return of earnings must be submitted annually, after which the Compensation Commissioner will issue an assessment which will then be payable within a certain period.