Registering a company in South Africa might seem like a drag. Here, we’ll supply you with the information you need to do it yourself. Below is a very detailed summary of all the hoops you have to jump through in order to register a firm with about 50 employees and start-up capital of 10 times the economy’s per-capita gross national income.
Register at the Companies and Intellectual Property Commission (CIPC)
The Companies Act 2008 of South Africa requires the Notice of Incorporation (CoR 14.1) and the Memorandum of Incorporation (MOI) (CoR 15.1 A-E) to be lodged at the Companies and Intellectual Property Commission (CIPC) upon registration. These forms are available for download from the CIPC’s website.
The Memorandum of Incorporation (MoI) form must include the following information:
The Notice of Incorporation form, lodged with the MoI, must include the following information:
In addition, the following documents must be submitted:
If a proposed name is rejected, the company may still be registered and the registration number then becomes the name of the company at incorporation. An approved name may then be submitted later. Application to reserve a name (Form CoR 9.1) costs R50 if done electronically and R75 if submitted manually. The applicant of a name reservation must be the same applicant for the new company registration documents, and will need to include a certified copy of their ID. The incorporation fee is R100.
Open a bank account
In order to open a bank account, the applicant must submit proof of the directors’ identity, and the original company documents. This procedure may take longer in practice if the required documents as per the Know your customer (“KYC”) requirements in The Financial Intelligence Centre Act No. 38 of 2001 are not in order.
Register for income tax, VAT, and employee withholding tax (PAYE and SITE) at the South African Revenue Service (SARS)
Businesses with annual taxable turnover of more than R 1,000,000 must register for VAT. The application for the registration of VAT is done on a VAT 101 form. CIPC and the South African Revenue Service are linked electronically. Once a company is incorporated the relevant South African Revenue Service office is advised and an income tax number is allocated to such entity.
The company must also register as an employer by means of an “EMP 101e” form that caters for the necessary registration of all the withholding taxes applicable to the taxpayer including PAYE (Pay as you Earn, i.e. employees’ tax), UIC (Unemployment Insurance Contributions). The employer is compelled to register as an employer in terms of paragraph 15 of the 4th Schedule to the Income Tax Act. Any employer who is liable to register with SARS for the payment of employees’ tax is also required to register with SARS for purposes of paying unemployment insurance contributions. An employer does not have discretion whether to register with SARS or the Unemployment Insurance Commissioner (Department of Labor), as the liability of the employer to register and pay employees’ tax and the Skills Development Levy will determine with whom an employer must be registered for UIC purposes. Skills Development Levy is a type of labor mandatory contribution which an employer has to pay to the South African Revenue Service. It is levied at 1% of gross salaries.
With regards to VAT applications, SARS assesses the viability of the business as part of the registration process. The company must appoint a public officer in terms of section 246 of the Tax Administration Act, No. 28 of 2011 and must advise the relevant SARS office of the full name, residential and postal address of such person. This person must be a resident of South Africa. SARS also carries out a physical inspection of the business premises and performs an interview with the public officer (or the tax practitioner authorized to carry out the registration process) before the VAT registration application is processed
SARS introduced additional verification procedures for VAT registration with effect from 13 November 2008 in an attempt to combat fraud. These requirements include:
Register for unemployment insurance at the Department of Labor
Agency: Department of Labor for Unemployment Insurance
To register for unemployment insurance, the company submits UI-8 & UI-19 application forms at once. Once the application is approved, The Department of Labour issues a form UI-33 to confirm registration.
Register with the Commissioner in deference to the Compensation for Occupational Injuries and Diseases Act
Registration forms can be obtained from the Department of Labor’s Web site. Businesses do not have to wait for the approval of registration to start operations. The relevant form is a W.As.2.
After completing and submitting the W.As.2 form at the office of the Compensation Commissioner, the Company will be sent the following documents to complete from time to time:
10 days on average