Getting a new business off the ground is an exciting time and with it comes a sense of urgency to make the business official. Perhaps you’re in the position where you have developed your small business over time and want to begin the process of formalising it.
Naturally, registering your business seems the next logical step. Not all business entities however require registration.
If you are a sole proprietor, then you may choose not to register the business. In fact, there may not be sufficient benefits for sole proprietors and informal businesses to register their businesses. Registrations have to be renewed annually at a prescribed fee, which is based on the annual turnover of the business. If you miss this renewal your business could be deregistered and reregistration can be a time-consuming and expensive process.
A sole proprietorship is a type of business entity that is owned and run by one natural person and there is no legal distinction between the owner and the business. In this case, you simply start using your chosen trading name, for example, when opening a bank account or getting business cards printed.
Keep in mind however that you may have to obtain a licence or permit, depending on the nature of the business you intend operating. For example, places that serve food need trade licences. Also, you will still have to be registered with the South African Revenue Services (SARS) and will be liable to pay tax if your turnover exceeds a certain threshold.
Registering with the CIPC or the High Court
If you’re not a sole proprietor and want to register your business, your next step is to determine whether you need to register with the Companies and Intellectual Property Commission (CIPC) or the High Court.
If you want to register your business as a trust, then you will need to register it with the Master of the High Court and you will need to do this in the jurisdiction where your business has the most business assets.
In all other cases, you will register with the CIPC. In other words, if you are a private company, personal liability company, non-profit organisation, cooperative or public company.
Options for registering with the CIPC
There are several ways you can go about registering with the CIPC. You can do it via the CIPC website at www.cipc.org.za and submit the required documentation at one of the CIPC offices. You can also do it online through the Nedbank website at www.Nedbank.co.za and submit the required information at a Nedbank branch near you. You’ll also be able to open your Nedbank business account at the same time if you wish.
A third option is to make use of the Swiftreg service, which you can access at any Nedbank branch. This is a comprehensive offering and suits businesses that have more complex requirements.
Remember, in all cases, you will need an ID document and proof of address for each registered owner.
For more information, see Registering your business, page 6-9, The Nedbank Essential Guide for Small Business Owners