Legal Documents For Starting A Business

No matter what the circumstances, South Africans always find a way to innovate. If you’re one of those, who has found a way to turn lemons into lemonade, why shouldn’t you make a living out of it. Starting a business, however, is never easy. It usually helps to have a decent lawyer on your side to manage the red tape, and that is always easier with affordable legal insurance. Your lawyer would be the first to tell you in detail what legal documents you need to submit to get your business off the up and running. In the meantime, we can give you the breakdown of the basics.

1. Company Registration At The CIPC

When you open a business, it is immediately recognised as a Sole Proprietor business – even if you haven’t registered your company with the Companies and Intellectual Property Commission (CIPC). Although it’s not illegal to operate a business without registering at the CIPC, there are a number of benefits to registering your company here:

  • Company registration number
  • Company tax number
  • Pre-requisite when applying for funding, loans, RFQs, contracts, and tenders

The registration process gets a bit trickier when you have business partners in the mix, but with a good lawyer on your side, you should have no trouble making your business legit. If you’re going it alone in the meantime, you can register your company on the CIPC’s e-portal.

2. B-BBEE Certificate Or Affidavit

For small businesses still in their beginnings, it may be better to apply for a B-BBEE affidavit than a B-BBEE certificate. While it’s not illegal to operate without some form of B-BBEE certification, having one is necessary for your company to apply for tenders, contracts, RFQs, many business loans in South Africa.

According to the latest South African regulations, businesses that make a turnover of less than R10 million per year may apply for an affidavit in place of a certificate. Once it is stamped by a Commissioner of Oaths, this will serve as your official B-BBEE document until you pass that R10-million turnover mark.

You can apply for a certificate or affidavit through the CIPC’s e-portal. A faster alternative is to have your lawyer (made affordable thanks to legal insurance) make the application on your behalf.

3. Employer Tax Registration At SARS

Even as a solo entrepreneur, you must make a priority of registering your hustle as an employer. In other words, your business employs you. There are some exceptions, like falling under a certain pay bracket.

You can register your business by visiting your nearest SARS office or contacting a tax compliance service. For more information on how to register your small business yourself, visit the SARS website.

4. COID Registration At The Department Of Labour

It is vital that you register your company at the Workmans Compensation Fund (COID), which covers your employees in case of any workplace injuries. This involves contributing a small fee to the fund on a regular basis. This fee is calculated as a percentage of your employees’ salaries. So, the more employee’s you want covered by the national compensation fund, the more you pay into it.

Next, you will need a Letter of Good Standing for any tenders you may approach in future. This document indicates to potential tenders that your employees are insured by the national fund. It offers said tenders some peace of mind and make them more likely to view you as a safer investment.

Support For Small And Medium Enterprises

At the end of the day, though, the best source of legal advice for you and the company you are looking to start is your lawyer. Since it’s so expensive to keep a lawyer on call, personal legal insurance can give you the peace of mind to help you focus on your goals and living your life to the full.

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