Introduction

There are a few things to consider when starting a business and want to apply for a tender. This is not only applicable when you want to apply for tenders, but also to keep your company compliant.

The following will be discussed:

• Company registration
• Share certificates
• Beneficial ownership
• Public officer
• UIF
• PAYE
• VAT
• COIDA
• BEE certificate

Company Registration

The first step is to register a private company. You need to apply for a name reservation at CIPC first. After the name is approved, you can register your company. During this process the first directors are appointed. The company will also receive a tax number from SARS automatically.

Click here to get your company registered for only R350.

Share certificates

Why does my company need share certificates?

Companies need to issue share certificates to indicate who owns the shares of the company.

What is the difference between a shareholder and a director?

A director is basically an employee of the company who oversees the day to day running of the company. A shareholder is not necessarily involved in the daily management of the company. They are the ones who owns the shares, thus they are the owners of the company. Shareholders also have the power to appoint or lay off directors and appoint a board of the company.

When should share certificates be issued?

When the company is registered, one has to indicate to CIPC how many shares the company has. As soon as a company is registered, the share certificates should be issued by the company and signed by the directors. As soon as more shares are issued, or shares sold, new certificates should be issued. A register must also be kept from when the company starts and should include all the names of shareholders and the amount of shares they own. This register should be updated as soon as the shareholders change.

It is very important to keep these records up to date from when the company started. From a legal point of view, it can be difficult to proof that you are an owner of the company at a later stage, even if you are a director.

Click here to get share certificates for only R50 each.

Beneficial Ownership

What is beneficial ownership?

This is basically a process created by CIPC where you have to declare the shareholders’ details for your business.

Who needs to submit their beneficial ownership details?

The following type of companies need to submit their details to CIPC:

• Profit companies
• Non profit companies
• External companies
• Close corporations

The requirement to submit falls into two different categories:

Affected companies

An “affected company” is a regulated company as set out in section 117 (1) (i) of the Companies Act and a private company that is controlled by or is a subsidiary of a regulated company.

Non affected companies

These refer to any other business that does not qualify under the definition of an affected company, but there is a shareholder or shareholders that owns more than 5% of the total company shares.

When should I submit and what happens if I don’t?

All existing companies should submit their beneficial ownership details to CIPC immediately. Newly registered companies should submit within 10 days of registration of the company. CIPC has indicated that they will send compliance notices to companies who do not submit their details. In some cases they will even go so far as to deregister the company, which can cause the bank to freeze the business’ bank account.

Click here to have your beneficial ownership submitted for R250.

Public officer

The purpose of a public officer

Every business needs to appoint a public officer at SARS. This is not only to gain access to eFiling, but this person will also be responsible for overseeing that tax returns are submitted and tax due to SARS is paid.

Appointment process.

The appointment of a public officer can be done online via the SARS website. The supporting documents have to be in order in order for the appointment to be successful. Click here for a list of the supporting documents. After the appointment has been submitted, the turnaround time to finalize the application is 21 business days.

Click here to have a public officer appointed for R250,

UIF

What is UIF?

UIF is an abbreviation for the unemployment insurance fund. This fund is there to assist employees with a temporary income when they loose their employment.

Who should register for UIF?

Any employer who has an employee who works more than 24 hours per month should register. This also includes the employers of domestic workers who work more than 24 hours per month.

Amount to be deducted.

1% should be deducted from the employees salary, up to a maximum of R17 712. Another 1% should be contributed by the employer. The total UIF amount should be declared to the department of labour using the Ufiling system. The system will then generate an assessment which should be paid before the 7th of the next month.

If an employer is registered for PAYE, the UIF will be paid over to SARS with the PAYE. But the records should still be submitted on Ufiling every month.

Click here to get your business registered for UIF for R500.

PAYE

Who needs to register for PAYE?

All businesses that has an employee that earns more than the current threshold, should register. The current threshold is R8 009 per month. It does not matter what type of legal entity your business is, if you meet this requirement, you have to register, whether you are a private company, non profit company or sole proprietor etc.

Monthly process.

Every month, the PAYE, or employee tax, has to be deducted from the employees salary and paid over to SARS. It has to be paid before the 7th of the following month to avoid penalties.

It is mandatory for employers to deduct employee tax from their employees.

Tax certificate

Every year, during May, tax certificates have to be issued to employees. This process is called the PAYE recon or EMP501. This is a summary of the tax deducted from employees during the financial year, and the amount paid over to SARS. The certificate includes the remuneration of the employee and the tax deducted. The employees will use these certificates to submit their personal income tax returns.

The EMP501 recons can only be submitted electronically, the manual process has been phased out by SARS.

Employers also has to submit a mid year recon, which covers the period of March to August.

SDL

If any employers total remuneration to all employees exceeds R500 000, they have to register for SDL(Skills development levy). This is a fund created by government to fund the learnership for employees. An amount of 1% of every employees salary should be contributed towards this, and paid over to SARS with the PAYE. Please note that this is an employer contribution and should not be deducted from employees.

Click here to have your business registered for PAYE for R500.

VAT

Compulsory registration

All companies should register for VAT as soon as their turnover exceeds R1m for a period of 12 consecutive months.

Voluntary registration

Companies are allowed to register for VAT if the turnover has exceeded R50 000 during the past 12 months, or is likely to exceed R50 000 in the 12 months following registration.

Companies can also register if the turnover for the month preceding the registration date exceeded R4 200. Or where the average over a period of 2 to 11 months was R4 200.

Companies are also allowed to register for VAT if the turnover is expected to exceed R50 000 in the 12 months after the VAT registration date. In this case, proof must be supplied to SARS in the form of a written contract with a customer.

Registration can also be done when the expenses exceeded R50 000 in the 12 months preceding the registration or is expected to exceed R50 000 in the 12 months after registration.

Another instance where a company can register for VAT is when a company enters into a finance agreement or credit agreement with a company that is registered under the NCR.

It is important to note that if you want to register for VAT, you will have to have proof that your business meets any of the requirements as mentioned above. The turnaround time for a VAT registration at SARS is 21 business days.

Click here for register for VAT for R800.

COIDA

What is COIDA?

COIDA is an insurance that covers your employees in the case where they are injured whilst on duty or contract a disease.

Who needs to register?

All business have to register, whether it’s a private company or close corporation, you have to register. The business needs to be registered as soon as the first employee is employed.

What happens after registration?

The business have to submit a return of earnings to COIDA every year in May. The information submitted on this return includes the actual salaries for the past financial year. It also includes the provisional salaries for the next financial year.

As soon as the return is submitted, the department of labour will issue an assessment. The amount payable is based on rates that are published by the South African government on an annual basis. The rate linked to different industries is relative to the working conditions employees are exposed to. Thus, someone who only has admin employees will pay less than the owner of a construction company.

Letter of good standing

After the assessment is paid, the business will be issued with a letter of good standing which is valid for one year.

If the business does not have the financial ability to pay the whole assessment amount in one instalment, a payment arrangement can be made with the department. They will then issue a letter of good standing which is valid for one month with each installment, until the whole amount is paid.

Click here to register for COIDA for only R500.

BEE Certificate

A company should have a BEE certificate which indicates the BEE score of the company. The score is calculated using the ownership of the company.

Click here to get a BEE certificate for only R250.