Business Formation

Reserve the company name

Agency: Companies and Intellectual Property Commission (CIPC)

In order to secure a name for the company, the business founder can either reserve a name, use a name that has been previously approved, or register the company using the registration number provided by the Companies and Intellectual Property Commission (CIPC) as the company name.

It is most common to apply online for name reservation, before registering a new company. If the applicant chooses this option, he or she will need to enter between 1 and 4 proposed names, in order of preference. The first available name will be selected. The cost is 50 ZAR if done electronically and 75 ZAR if done through a paper system.

Time and cost: 3 days, ZAR 50

Register at the Companies and Intellectual Property Commission (CIPC)

Agency: Companies and Intellectual Property Commission (CIPC)

There are four different ways to register a company with the Companies and Intellectual Property Commission (CIPC). The most common one it to apply for incorporation at the CIPC website (www.cipc.co.za). Registration can also be done at self-service terminals, certain bank branches, and by email.

To register the company online, the entrepreneur needs to register as a customer on the CIPC website (www.cipc.co.za). Once registered, the applicant must fund the new virtual account with at least 125 ZAR to cover the registration cost (125 ZAR). The account can be funded via wire transfer.

During the registration process the following information must be provided

* Details about the owners/directors:

  • Name(s)
  • Country of origin
  • ID/Passport number
  • Appointment date
  • Date of Birth
  • Phone, email
  • Physical addresses as well as the postal addresses

* Details about the company:

  • Financial year end
  • Authorized shares
  • Email address, website, physical address and postal code

Once the steps mentioned above are completed, an email will be sent to the applicant requesting additional documentation to be emailed to CIPC:

  • Certified ID copies of all indicated initial directors and founders
  • Certified ID copy of applicant if not the same as one of the indicated initial directors or founders
  • Signed registration forms

CIPC has a pledge to register the company in 3 working days after all documents have been submitted. Once the company has been registered, the customer receives a confirmation by email and a link to the CIPC website, allowing to retrieve the disclosure certificate and the company’s incorporation documents.

Time and cost: 5 days on average, ZAR 125

Open a bank account

Agency: Bank

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 if the required documents per the Know Your Customer (“KYC”) requirements in the Financial Intelligence Centre Act No. 38 of 2001 are not in order.

Time and cost: 1 day on average, no charge

Register for income tax and withholding taxes (PAYE, UIF and SDL)

Agency: South African Revenue Service (SARS)

The Companies and Intellectual Property Commission (CIPC) and the South African Revenue Service (SARS) are linked electronically. When the entrepreneur visits a SARS branch to register for income tax, SARS retrieves the information previously provided by the entrepreneur to the CIPC during company registration.

Once the company has been registered, the entrepreneur must visit the SARS office to complete the registration with the following taxes:

a) Income tax registration – for which the applicant needs to present:

  • Owner ID
  • Registration Certificate
  • Bank Statement

b) Employees tax (PAYE), Unemployment Insurance Fund (UIF) and Skills Development Levy (SDL) registration:

  • The entrepreneur must submit the EMP 101e form which is available online or at the local SARS office. Registration is immediate and can be done online or at the branch.
  • Pay as you earn (PAYE) tax refers to the tax required to be deducted by an employer from an employee’s remuneration paid. The employer is compelled to register in terms of paragraph 15 of the 4th Schedule to the Income Tax Act.
  • Unemployment Insurance Fund (UIF): These funds are used to provide short-term relief should workers become unemployed or unable to work for various reasons. Any employer who is liable to register for the employees tax (PAYE) is required to register with SARS for the unemployment insurance contributions.
  • Skills Development Levy (SDL): This levy is used by the government to fund education and training as stated in the Skills Development Act, 1998. This levy is payable monthly by employers to SARS.

Time and cost: 1 day, no charge

Register for VAT

Agency: South African Revenue Service (SARS)

Businesses with annual taxable turnover of more than ZAR 1,000,000 must register for VAT. The application for the registration of VAT is done on a VAT 101 form.

VAT registrations are completed in real time at the entrepreneurs’ nearest SARS branch. It typically takes a week to secure an appointment. In order to register for VAT, an entrepreneur will need to complete and sign the VAT 101 form and submit the form together with the following documentation:

  • Certified copy of certificate of incorporation;
  • Certified copy of proof of the company’s residential address, not older than three (3) months;
  • Original bank statement, not older than three (3) months;
  • Original balance sheets and income statements (proof of annual turnover);
  • Original identity document and certified copy thereof of the representative vendor submitting the VAT 101 form;
  • Certified copies of the identity documentation of the directors of the company; and
  • Original proof of residential address of the representative vendor.

Time and cost: 7 days on average, no charge

Register the company with the Unemployment Insurance Fund (UIF)

Agency: Department of Labor for Unemployment Insurance

According to the Unemployment Insurance Act and the Unemployment Insurance Contributions Act, all employees working more than 24 hours per month must be registered with the Unemployment Insurance Fund (UIF). The employer is liable for the registration of the employees.

Employers must pay unemployment insurance contributions of 2% of the salary of each worker’s pay per month. The employer covers 1% and the employee another 1%. The employer is responsible of withholding the employee’s 1%. The payment is done through SARS but the employee claims are requests through the UIF.

In order to register with UIF, forms UI-8 (company registration) and UI-19 (employees registration) must be submitted either to the Pretoria UIF office, to the labour centers or by email. When the process has been completed, a confirmation letter (form UI-33) will be sent by email.

Time and cost: 5 days (simultaneous with previous procedure), no charge

Register employees with the Compensation Fund

Agency: Office of the Compensation Commissioner

According to the Compensation for Occupational Injuries & Diseases Act 130/1993, amended in 1997, the employer is responsible for registering employees with the Compensation Fund.

Registration forms can be obtained from the Department of Labour’s website (www.labour.gov.za). The relevant form is 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 at various times throughout the year (these are not required for registration):

  • W.As.8 must be filed within 30 (thirty) days of financial year end, which must balance with Employer’s COIDA account;
  • W.As.6a which details the assessment of the Commissioner for premiums payable, excluding any amounts paid in advance;
  • WG30, W.As.2 and W.Acl(E) which are claim forms

The time it takes to complete this step varies according to the level of risk under which the business is assessed.

Time and cost: 30 days (simultaneous with previous procedure), no charge